One of the assumptions of the mobile receptor hypothesis as it relates to G protein-coupled receptors is that the stoichiometry of receptor, G protein, and effector is 1:1:1 (Bourne, H. R., Sanders, D. A., and McCormick, F. (1990) Nature 348, 125–132). Many studies on the cooperativity of agonist binding are incompatible with this notion and have suggested that both G proteins and their associated receptors can be oligomeric. However, a clear physical demonstration that G protein-coupled receptors can indeed interact as dimers and that such interactions may have functional consequences was lacking. Here, using differential epitope tagging we demonstrate that β2-adrenergic receptors do form SDS-resistant homodimers and that transmembrane domain VI of the receptor may represent part of an interface for receptor dimerization. The functional importance of dimerization is supported by the observation that a peptide derived from this domain that inhibits dimerization also inhibits β-adrenergic agonist-promoted stimulation of adenylyl cyclase activity. Moreover, agonist stimulation was found to stabilize the dimeric state of the receptor, while inverse agonists favored the monomeric species, which suggests that interconversion between monomeric and dimeric forms may be important for biological activity. One of the assumptions of the mobile receptor hypothesis as it relates to G protein-coupled receptors is that the stoichiometry of receptor, G protein, and effector is 1:1:1 (Bourne, H. R., Sanders, D. A., and McCormick, F. (1990) Nature 348, 125–132). Many studies on the cooperativity of agonist binding are incompatible with this notion and have suggested that both G proteins and their associated receptors can be oligomeric. However, a clear physical demonstration that G protein-coupled receptors can indeed interact as dimers and that such interactions may have functional consequences was lacking. Here, using differential epitope tagging we demonstrate that β2-adrenergic receptors do form SDS-resistant homodimers and that transmembrane domain VI of the receptor may represent part of an interface for receptor dimerization. The functional importance of dimerization is supported by the observation that a peptide derived from this domain that inhibits dimerization also inhibits β-adrenergic agonist-promoted stimulation of adenylyl cyclase activity. Moreover, agonist stimulation was found to stabilize the dimeric state of the receptor, while inverse agonists favored the monomeric species, which suggests that interconversion between monomeric and dimeric forms may be important for biological activity.