Abstract Chemokine receptors constitute an important subfamily of G protein-coupled receptors (GPCRs), and they are critically involved in a broad range of immune response mechanisms. Ligand promiscuity among these receptors makes them an interesting target to explore novel aspects of biased agonism. Here, we comprehensively characterize two chemokine receptors namely, CXCR4 and CXCR7, which share a common chemokine agonist (CXCL12), in terms of their G-protein coupling, β-arrestin (βarr) recruitment, contribution of GRKs, and ERK1/2 MAP kinase activation. We observe that CXCR7 lacks G-protein coupling while maintaining robust βarr recruitment with a major contribution of GRK5/6. On the other hand, CXCR4 displays robust G-protein activation as expected, however, it exhibits significantly reduced βarr-coupling compared to CXCR7 in response to their shared natural agonist, CXCL12. These two receptors induce distinct βarr conformations even when activated by the same agonist, and CXCR7, unlike CXCR4, fails to activate ERK1/2 MAP kinase. We further determine the crystal structure of βarr2 in complex with a carboxyl-terminal phosphopeptide derived from CXCR7, which reveals a smaller interdomain rotation than observed previously for activated βarrs. Importantly, structure-guided cellular experiments reveal a key contribution of a single phosphorylation site in CXCR7 on βarr recruitment and endosomal trafficking. Taken together, our study provides molecular insights into intrinsic bias encoded in the CXCR4-CXCR7 system, and it has broad implications for therapeutically important framework of biased agonism.