The epidermal growth factor (EGF) receptor is an important mediator of intestinal epithelial cell proliferation. We studied cell-surface localization of this molecule in Caco-2 cells and characterized cellular responses to apical or basolateral EGF stimulation. 125I-labeled EGF bound almost exclusively to a 180-kDa molecule, existing as a single high-affinity population by Scatchard analysis. On basolateral membranes 13- to 15-fold more ligand binding was seen. Apical/basolateral differences were not significantly altered by incubation with either blocking antibody to EGF receptor or transforming growth factor-alpha (TGF-alpha) neutralizing antibody. Even though apical EGF receptors were demonstrated, only basolateral membrane stimulation with EGF increased tyrosine kinase activity and enhanced uptake of [3H]thymidine. Continuous exposure to EGF during culture significantly increased monolayer DNA content. These data demonstrate that Caco-2 cell proliferation is driven solely by basolateral membrane EGF receptor, despite the presence of lesser amounts of this molecule on the apical surface. Differences between apical and basolateral membrane receptor expression are not the result of polarized secretion of TGF-alpha or other EGF receptor ligands.