To investigate the cooperativity of insulin's structure, a cavity‐forming substitution was introduced within the hydrophobic core of an engineered monomer. The substitution, Ile^A2→Ala in the A1–A8 α‐helix, does not impair disulfide pairing between chains. In accord with past studies of cavity‐forming mutations in globular proteins, a decrement was observed in thermodynamic stability (ΔΔG_u 0.4–1.2 kcal/mole). Unexpectedly, CD studies indicate an attenuated α‐helix content, which is assigned by NMR spectroscopy to selective destabilization of the A1–A8 segment. The analog's solution structure is otherwise similar to that of native insulin, including the B chain's supersecondary structure and a major portion of the hydrophobic core. Our results show that (1) a cavity‐forming mutation in a globular protein can lead to segmental unfolding, (2) tertiary packing of Ile^A2, a residue of low helical propensity, stabilizes the A1–A8 α‐helix, and (3) folding of this segment is not required for native disulfide pairing or overall structure. We discuss these results in relation to a hierarchical pathway of protein folding and misfolding. The Ala^A2 analog's low biological activity (0.5% relative to the parent monomer) highlights the importance of the A1–A8 α‐helix in receptor recognition.