Cassette and deletion mutagenesis were used to analyze the function of the amphipathic alpha-helices in the transmembrane domain of DAB389-interleukin-2 (IL-2), a fusion protein which is targeted to the interleukin-2 receptor. We demonstrate that the in-frame deletion of 60 amino acids, from Asn204 to Glu263 in DAB389-IL-2, results in complete loss of cytotoxic activity, whereas when the amphipathic regions from Asp208 to Ser220 and Ala244 to His258 are replaced with idealized amphipathic helices composed of repeating Glu, Lys, and Leu residues, the mutant fusion toxin has low but detectable activity. DAB389-IL-2 and both variants form channels in artificial phospholipid bilayers with conductances identical to those formed by diphtheria toxin. Both mutant fusion toxins bind to the high affinity IL-2 receptor with affinities similar to that of DAB389-IL-2. The fact that these mutants have markedly reduced or absent cytotoxic activity, but possess "wild type" catalytic activity, binding affinities, and channel conductances, suggests the existence of a step in the intoxication pathway, defective in the mutants, which occurs after DAB389-IL-2 binds to the IL-2 receptor. It is unknown whether this step occurs prior or subsequent to channel formation, but it is essential for the efficient delivery of the ADP-ribosyltransferase from DAB389-IL-2 to the cytosol of target cells.