In this study, we investigated the mechanism by which a peptide mimicking the third cytoplasmic loop of the vasopressin V2 receptor inhibits signaling. This loop was synthesized as a cyclic peptide (i3 cyc) that adopted defined secondary structure in solution. We found that i3 cyc inhibited the adenylyl cyclase activity induced by vasopressin or a nonhydrolyzable analog of GTP, guanosine 5-O-(3-thio)triphosphate. This peptide also affected the specific binding of [ 3 H]AVP by converting vasopressin binding sites from a high to a low affinity state without any effect on the global maximal binding capacity. The inhibitory actions of i3 cyc could also be observed in the presence of maximally uncoupling concentration of guanosine 5-O-(3-thio)triphosphate, indicating a direct effect on the receptor itself and not exclusively on the interaction between the Gs protein and the V 2 receptor (V 2 -R). Bioluminescence resonance energy-transfer experiments confirmed this assumption, because i3 cyc induced a significant inhibition of the bioluminescence resonance energy-transfer signal between the Renilla reniformis luciferase and the enhanced yellow fluorescent protein fused V 2 -R. This suggests that the proper arrangement of the dimer could be an important prerequisite for triggering Gs protein activation. In addition to its effect on the receptor itself, the peptide exerted some of its actions at the G protein level, because it could also inhibit guanosine 5-O-(3-thio)triphosphate-stimulated AC activity. Taken together, the data demonstrate that a peptide mimicking V 2 -R third intracellular loop affects both the dimeric structural organization of the receptor and has direct inhibitory action on Gs.G protein-coupled receptors (GPCRs), 1 a superfamily of seven transmembrane domain proteins, act as molecular switches that are able to transmit signals from extracellular stimuli to G proteins present on the cytoplasmic side of the plasma membrane. These receptors promote ligand dependent GDP/GTP exchange in the G␣ subunit of the heterotrimeric G protein leading to the activation of effectors. It is well established that intracellular loops of these receptors are important structural elements for their coupling to the heterotrimeric G proteins (1). Yet the precise understanding of the mechanisms by which GPCRs regulate G protein activity remains limited because of the general difficulties in characterizing the structure of integral membrane proteins. One approach considered to circumvent these problems is the use of synthetic peptides mimicking receptor cytosolic domains to probe the events responsible for G protein activation. For the rat vasopressin V 1a receptor, a peptide mimicking its second intracellular loop was found to specifically inhibit vasopressin-specific binding (2). In other cases, short peptides mimicking GPCR third intracellular loops were found to act on the coupling between the receptor and the G protein (3-8). Expressed as a minigene, the ␣ 1b -adrenergic i3 loop was shown to inhibit Gq signaling (9). In ...