Binding of the ␣-factor pheromone to its G-protein-coupled receptor (encoded by STE2) activates the mating pathway in MATa yeast cells. To investigate whether specific interactions between the receptor and the G protein occur prior to ligand binding, we analyzed dominant-negative mutant receptors that compete with wild-type receptors for G proteins, and we analyzed the ability of receptors to suppress the constitutive signaling activity of mutant G␣ subunits in an ␣-factor-independent manner. Although the amino acid substitution L236H in the third intracellular loop of the receptor impairs G-protein activation, this substitution had no influence on the ability of the dominant-negative receptors to sequester G proteins or on the ability of receptors to suppress the GPA1-A345T mutant G␣ subunit. In contrast, removal of the cytoplasmic C-terminal domain of the receptor eliminated both of these activities even though the C-terminal domain is unnecessary for G-protein activation. Moreover, the ␣-factor-independent signaling activity of ste2-P258L mutant receptors was inhibited by the coexpression of wild-type receptors but not by coexpression of truncated receptors lacking the C-terminal domain. Deletion analysis suggested that the distal half of the C-terminal domain is critical for sequestration of G proteins. The C-terminal domain was also found to influence the affinity of the receptor for ␣-factor in cells lacking G proteins. These results suggest that the C-terminal cytoplasmic domain of the ␣-factor receptor, in addition to its role in receptor downregulation, promotes the formation of receptor-G-protein preactivation complexes.In the yeast Saccharomyces cerevisiae, the ␣-factor pheromone activates a cell-surface receptor on MATa cells, leading to cell division arrest and expression of genes necessary for conjugation (1,16,38). The ␣-factor receptor (encoded by STE2) belongs to the large family of G-protein-coupled receptors (GPCRs), which includes receptors for hormones, neurotransmitters, and sensory stimuli (11, 57). GPCRs transduce their signal by activating a heterotrimeric guanine nucleotide binding protein (G protein) that results in the exchange of GDP for GTP in the G␣ subunit (6,20). In the case of the yeast pheromone pathway, the GTP-bound G␣ subunit releases the G␥ subunits, and the free G␥ complexes then mediate the subsequent events in the response pathway (1, 16, 38). Although the yeast pheromone receptors and other GPCRs respond to different extracellular signals and share no significant sequence homology, they possess a common structural topology composed of seven transmembrane domains connected by intracellular and extracellular loops. In addition, these receptors exhibit a similar organization of functional domains. For example, as in many GPCRs, the third intracellular loop of the ␣-factor receptor functions in G-protein coupling (10, 58).Moreover, the cytoplasmic C-terminal domain of both yeast and mammalian receptors mediates ligand-induced endocytosis (46, 49) and plays a role in desen...