Members of the class B family of G protein-coupled receptors (GPCRs) bind peptide hormones and have causal roles in many diseases, ranging from diabetes and osteoporosis to anxiety. Although peptide, small-molecule, and antibody inhibitors of these GPCRs have been identified, structure-based descriptions of receptor antagonism are scarce. Here we report the mechanisms of glucagon receptor inhibition by blocking antibodies targeting the receptor's extracellular domain (ECD). These studies uncovered a role for the ECD as an intrinsic negative regulator of receptor activity. The crystal structure of the ECD in complex with the Fab fragment of one antibody, mAb1, reveals that this antibody inhibits glucagon receptor by occluding a surface extending across the entire hormone-binding cleft. A second antibody, mAb23, blocks glucagon binding and inhibits basal receptor activity, indicating that it is an inverse agonist and that the ECD can negatively regulate receptor activity independent of ligand binding. Biochemical analyses of receptor mutants in the context of a high-resolution ECD structure show that this previously unrecognized inhibitory activity of the ECD involves an interaction with the third extracellular loop of the receptor and suggest that glucagon-mediated structural changes in the ECD accompany receptor activation. These studies have implications for the design of drugs to treat class B GPCR-related diseases, including the potential for developing novel allosteric regulators that target the ECDs of these receptors.T he glucagon receptor (GCGR) is a member of the class B G protein-coupled receptor (GPCR) family (1) that mediates the activity of glucagon, a pancreatic islet-derived peptide hormone that plays a central role in the pathophysiology of diabetes (2). Several GCGR antagonists that improve glycemic control in animal models of diabetes and diabetic patients have been described (3-8). Although biochemical studies of glucagon and GCGR mutants have facilitated the mapping of some elements that contribute to glucagon binding (4, 9-12), the molecular mechanisms of GCGR activation and inhibition remain largely unknown because there are currently no high-resolution structures of GCGR. The current model for activation class B GPCRs proposes a tethering mechanism whereby the C-terminal half of the peptide ligand first binds a large extracellular domain (ECD), thereby enabling a high-affinity interaction of the N-terminal half of the ligand with a cleft formed by the transmembrane α-helical bundle (13,14), termed the juxtamembrane (JM) domain. This interaction induces a structural change in the transmembrane and intracellular face of the receptor that enables G protein coupling, likely similar to that described for the activated form of the β-adrenergic receptor (15). Recent structural studies of several class B GPCR ECDs and ECD-ligand complexes support this model (16)(17)(18)(19)(20)(21). Glucagon likely interacts with GCGR in a similar fashion to the interaction of other peptide ligands with class B GPC...