To investigate the role of receptor aggregation in EGF binding, we construct a mathematical model describing receptor dimerization (and higher levels of aggregation) that permits an analysis of the influence of receptor aggregation on ligand binding. We answer two questions: (a) Can Scatchard plots of EGF binding data be analyzed productively in terms of two noninteracting receptor populations with different affinities if EGF induced receptor aggregation occurs? No. If two affinities characterize aggregated and monomeric EGF receptors, we show that the Scatchard plot should have curvature characteristic of positively cooperative binding, the opposite of that observed. Thus, the interpretation that the high affinity population represents aggregated receptors and the low affinity population nonaggregated receptors is wrong. If the two populations are interpreted without reference to receptor aggregation, an important determinant of Scatchard plot shape is ignored. (b) Can a model for EGF receptor aggregation and EGF binding be consistent with the "negative curvature" (i.e., curvature characteristic of negatively cooperative binding) observed in most Scatchard plots of EGF binding data? Yes. In addition, the restrictions on the model parameters required to obtain negatively curved Scatchard plots provide new information about binding and aggregation. In particular, EGF binding to aggregated receptors must be negatively cooperative, i.e., binding to a receptor in a dimer (or higher oligomer) having one receptor already bound occurs with lower affinity than the initial binding event. A third question we consider is whether the model we present can be used to detect the presence of mechanisms other than receptor aggregation that are contributing to Scatchard plot curvature. For the membrane and cell binding data we analyzed, the best least squares fits of the model to each of the four data sets deviate systematically from the data, indicating that additional factors are also important in shaping the binding curves. Because we have controlled experimentally for many sources of receptor heterogeneity, we have limited the potential explanations for residual Scatchard plot curvature.