We show here that the rat vasopressin V(1b) receptor simultaneously activates both the G(q/11)-inositol phosphate (IP) and G(s)-cAMP pathways when transiently expressed in Chinese hamster ovary, human embryonic kidney (HEK) 293, and COS-7 cells and stimulated with arginine-vasopressin. Higher concentrations of the hormone, however, were needed to trigger the cAMP pathway. The nonmammalian analog arginine-vasotocin and the selective V(1b) agonist d[Cha(4)]vasopressin also activated the cAMP and IP pathways, although d[Cha(4)]-vasopressin elicited the two responses with equivalent potencies. We determined that the V(1b) receptor is present as a homodimer at the plasma membrane. Treatment of V(1b)-transfected HEK-293 cells with methyl-beta-cyclodextrin, a drug known to dissociate cholesterol-rich domains of the plasma membrane, shifted the EC(50) of the vasopressin-induced cAMP accumulation to lower concentrations and, remarkably, increased the hormone efficacy related to the activation of this second messenger system. In parallel, the vasopressin-mediated activation of the IP pathway was slightly reduced without modification of its EC(50). These results suggest that, as with many other G protein-coupled receptors, when transfected in heterologous cell systems, the V(1b) receptor forms dimers that signal differentially through the G(q/11) and G(s) proteins depending on the nature of the ligand as well as on its localization within specialized compartments of the plasma membrane. The present study thus illustrates how signal transduction associated with the activation of a G protein-coupled receptor can be versatile and highly dependent on both the cell context and the chemical nature of the extracellular signaling messenger.