Insulin-like growth factor I receptor (IGF-1R) signaling is essential for cell, organ, and animal growth. The C-terminal tail of the IGF-1R exhibits regulatory function, but the mechanism is unknown. Here, we show that mutation of Ser-1248 (S1248A) enhances IGF-1R in vitro kinase activity, autophosphorylation, Akt/mammalian target of rapamycin activity, and cell growth. Ser-1248 phosphorylation is mediated by GSK-3 beta in a mechanism that involves a priming phosphorylation on Ser-1252. GSK-3 beta knock-out cells exhibit reduced IGF-1R cell surface expression, enhanced IGF-1R kinase activity, and signaling. Examination of crystallographic structures of the IGF-1R kinase domain revealed that the (SFYYS1252)-S-1248 motif adopts a conformation tightly packed against the kinase C-lobe when Ser-1248 is in the unphosphorylated state that favors kinase activity. S1248A mutation is predicted to lock the motif in this position. In contrast, phosphorylation of Ser-1248 will drive profound structural transition of the sequence, critically affecting connection of the C terminus as well as exposing potential protein docking sites. Decreased kinase activity of a phosphomimetic S1248E mutant and enhanced kinase activity in mutants of its predicted target residue Lys-1081 support this auto-inhibitory model. Thus, the SFYYS motif controls the organization of the IGF-1R C terminus relative to the kinase domain. Its phosphorylation by GSK-3 beta restrains kinase activity and regulates receptor trafficking and signaling.