It is fundamentally important to define how agonist-receptor interaction differs from antagonist-receptor interaction. The V1a vasopressin receptor (V1aR) is a member of the neurohypophysial hormone subfamily of G protein-coupled receptors. Using alanine-scanning mutagenesis of the N-terminal juxtamembrane segment of the V1aR, we now establish that Glu54 (1.35) is critical for arginine vasopressin binding. The mutant [E54A]V1aR exhibited decreased arginine vasopressin affinity (1700-fold) and disrupted signaling, but antagonist binding was unaffected. Mutation of Glu54 had an almost identical pharmacological effect as mutation of Arg46, raising the possibility that agonist binding required a mutual interaction between Glu54 and Arg46. The role of these two charged residues was investigated by 1) substituting Glu54; 2) inserting additional Glu/Arg in transmembrane helix (TM) 1; 3) repositioning the Glu/Arg in TM1; and 4) characterizing the reciprocal mutant [R46E/E54R]V1aR. We conclude that 1) the positive/negative charges need to be precisely positioned in this N terminus/TM1 segment; and 2) Glu54 and Arg46 function independently, providing two discrete epitopes required for high-affinity agonist binding and signaling. This study explains why Glu and Arg, part of an -R(X3)L/V(X3)E(X3)L- motif, are conserved at these loci throughout this G protein-coupled receptor subfamily and provides molecular insight into key differences between agonist and antagonist binding requirements.