Binding of agonists to G-protein-coupled receptors (GPCRs) activates heterotrimeric G proteins and downstream signaling. Agonistbound GPCRs are then phosphorylated by protein kinases and bound by arrestin to trigger desensitization and endocytosis. Arrestin plays another important signaling function. It recruits and regulates activity of an extracellular signal-regulated kinase (ERK) cascade. However, molecular details and timing of ERK activation remain fundamental unanswered questions that limit understanding of how arrestin-dependent GPCR signaling controls cell functions.Here we validate and model a system that tracks the dynamics of interactions of arrestin with receptors and of ERK activation using optical reporters. Our intermolecular FRET measurements in living cells are consistent with β-arrestin binding to M 1 muscarinic acetylcholine receptors (M 1 Rs) in two different binding modes, transient and stable. The stable mode persists for minutes after agonist removal. The choice of mode is governed by phosphorylation on key residues in the third intracellular loop of the receptor. We detect a similar intramolecular conformational change in arrestin in either binding mode. It develops within seconds of arrestin binding to the M 1 receptor, and it reverses within seconds of arrestin unbinding from the transient binding mode. Furthermore, we observed that, when stably bound to phosphorylated M 1 R, β-arrestin scaffolds and activates MEK-dependent ERK. In contrast, when transiently bound, β-arrestin reduces ERK activity via recruitment of a protein phosphatase. All this ERK signaling develops at the plasma membrane. In this scaffolding hypothesis, a shifting balance between the two arrestin binding modes determines the degree of ERK activation at the membrane.arrestin | GPCR | ERK | muscarinic receptor | receptor kinase A rrestin plays a fundamental role in the negative regulation of G-protein-coupled receptors (GPCRs) signaling because its binding to GPCRs hinders G-protein association with the receptors (1-5). Arrestin further recruits adaptor proteins and clathrin for the internalization and desensitization of the receptor (6). Additional functions have been suggested, with β-arrestin producing its own signaling through interactions with other effectors (7-9). For example, β-arrestin has binding sites for cRaf (MAPK kinase kinase), MEK (MAPK kinase), and ERK (MAPK) that mediate a signaling cascade for cell proliferation, cell migration, and actin dynamics after GPCR activation (10-13). Conventionally, MEK-dependent ERK signaling is described as involving GPCR-arrestin complexes on intracellular compartments such as endosomal vesicles (10, 14-16). However, whether similar complexes at the plasma membrane might trigger ERK signaling remains unknown. Electron microscope images of arrestin-receptor complexes together with modeling suggest that β-arrestin binds in two different modes, called transient binding and stable binding, to chimeric β 2 adrenergic receptors (β 2 -AR) containing the C terminus of vasopre...