Most G protein-coupled receptors contain a conserved pair of extracellular cysteine residues that are predicted to form a disulfide bond linking the first and second extracellular loops. Previous studies have shown that this disulfide bond may be critical for ligand binding, receptor activation, and/or proper receptor folding. However, the potential importance of the two conserved cysteine residues for proper receptor cell surface localization has not been investigated systematically. To address this issue, we used the rat M3 muscarinic receptor as a model system. Most studies were carried out with a modified version of this receptor subtype (lacking potential N-glycosylation sites and the central portion of the third intracellular loop) that could be readily detected via western blot analysis. Cys-->Ala mutant receptors were generated, transiently expressed in COS-7 cells, and then examined for their subcellular distribution and functional properties. ELISA and immunofluorescence studies showed that the presence of both conserved cysteine residues (corresponding to C140 and C220 in the rat M3 muscarinic receptor sequence) is required for efficient expression of the M3 muscarinic receptor on the cell surface. On the other hand, these residues were found not to be essential for protein stability (determined via immunoblotting) and receptor-mediated G protein activation (studied in second messenger assays). These results shed new light on the functional role of the two extracellular cysteine residues present in most G protein-coupled receptors.