Homologous desensitization of beta-adrenergic receptors, as well as adaptation of rhodopsin, are thought to be triggered by specific phosphorylation of the receptor proteins. However, phosphorylation alone seems insufficient to inhibit receptor function, and it has been proposed that the inhibition is mediated, following receptor phosphorylation, by the additional proteins beta-arrestin in the case of beta-adrenergic receptors and arrestin in the case of rhodopsin. In order to test this hypothesis with isolated proteins, beta-arrestin and arrestin were produced by transient overexpression of their cDNAs in COS7 cells and purified to apparent homogeneity. Their functional effects were assessed in reconstituted receptor/G protein systems using either beta 2-adrenergic receptors with Gs or rhodopsin with Gt. Prior to the assays, beta 2-receptors and rhodopsin were phosphorylated by their specific kinases beta-adrenergic receptor kinase (beta ARK) and rhodopsin kinase, respectively. beta-Arrestin was a potent inhibitor of the function of beta ARK-phosphorylated beta 2-receptors. Half-maximal inhibition occurred at a beta-arrestin:beta 2-receptor stoichiometry of about 1:1. More than 100-fold higher concentrations of arrestin were required to inhibit beta 2-receptor function. Conversely, arrestin caused half-maximal inhibition of the function of rhodopsin kinase-phosphorylated rhodopsin when present in concentrations about equal to those of rhodopsin, whereas beta-arrestin at 100-fold higher concentrations had little inhibitory effect. The potency of beta-arrestin in inhibiting beta 2-receptor function was increased over 10-fold following phosphorylation of the receptors by beta ARK, but was not affected by receptor phosphorylation using protein kinase A. This suggests that beta-arrestin plays a role in beta ARK-mediated homologous, but not in protein kinase A-mediated heterologous desensitization of beta-adrenergic receptors. It is concluded that even though arrestin and beta-arrestin are similar proteins, they display marked specificity for their respective receptors and that phosphorylation of the receptors by the receptor-specific kinases serves to permit the inhibitory effects of the "arresting" proteins by allowing them to bind to the receptors and thereby inhibit their signaling properties. Furthermore, it is shown that this mechanism of receptor inhibition can be reproduced with isolated purified proteins.