hCG is a member of a family of glycoprotein hormones which share a common alpha-subunit, but differ in their hormone-specific beta-subunits. The CG beta-subunit is unique in that it contains a hydrophilic carboxyl-terminal extension with four serine O-linked oligosaccharides. To examine the role of the O-linked oligosaccharides and the carboxyl-terminal extension of hCG beta on receptor binding, steroidogenesis in vitro, and ovulation induction in vivo, site-directed mutagenesis and gene transfer methods were used. Wild-type hCG alpha and hCG beta expression vectors were transfected into an O-glycosylation mutant Chinese hamster ovary cell line to produce intact dimer hCG lacking the beta-subunit O-linked oligosaccharide units. In addition, a mutant hCG beta gene (CG beta delta T) was generated which contained a premature termination signal at codon 115. This gene was cotransfected with the hCG alpha gene into Chinese hamster ovary cells to produce hCG dimer which lacked the carboxyl-terminal amino acids 115-145 of hCG beta (truncated hCG). The O-linked oligosaccharide deficient or truncated hCG derivatives were examined for their ability to bind to the mouse LH/hCG receptor and stimulate cAMP and steroidogenesis in vitro. These studies show that the O-linked oligosaccharides and carboxyl-terminal extension play a minor role in receptor binding and signal transduction. In contrast, comparison of the stimulatory effects of truncated and wild-type hCG in a rat ovulation assay in vivo via either intrabursal or iv injection revealed that the truncated derivative was approximately 3-fold less active than wild-type hCG. These findings indicate that the carboxyl-terminal extension of hCG beta and associated O-linked oligosaccharides are not important for receptor binding or in vitro signal transduction, but are critical for in vivo biological responses.