On the basis of the homology between the amino acid sequences of the beta-adrenergic receptor (beta AR) and the opsin proteins we have proposed that the ligand binding domain lies within the seven transmembrane hydrophobic regions of the protein, which are connected by hydrophilic regions alternatively exposed extracellularly and intracellularly. We have systematically examined the importance of each of these regions by making a sequential series of deletions in the gene for the hamster beta AR which encompass most of the protein coding region. The ability of the corresponding mutant receptors to be expressed, localized to the cell membrane, and bind beta-adrenergic ligands has been analyzed, using transient expression in COS-7 cells. The hydrophobic regions and the hydrophilic segments immediately adjacent to the membrane cannot be removed without affecting the processing and membrane localization of the beta AR. However, most of the hydrophilic regions appear to be dispensable for ligand binding. In addition, we observed that substitution of the conserved cysteine residues at positions 106 and 184 dramatically altered the ligand binding characteristics of the beta AR, suggesting the occurrence of a disulfide bond between these two residues in the native protein. These data are discussed in terms of the tertiary structure of the beta AR.