The complex of the regulator of G protein signaling (RGS), Gbeta(5)-RGS7, can inhibit signal transduction via the M3 muscarinic acetylcholine receptor (M3R). RGS7 consists of three distinct structural entities: the DEP domain and its extension DHEX, the Ggamma-like (GGL) domain, which is permanently bound to Gbeta subunit Gbeta(5), and the RGS domain responsible for the interaction with Galpha subunits. Inhibition of the M3R by Gbeta(5)-RGS7 is independent of the RGS domain but requires binding of the DEP domain to the third intracellular loop of the receptor. Recent studies identified the dynamic intramolecular interaction between the Gbeta(5) and DEP domains, which suggested that the Gbeta(5)-RGS7 dimer could alternate between the "open" and "closed" conformations. Here, we identified point mutations that weaken DEP-Gbeta(5) binding, presumably stabilizing the open state, and tested their effects on the interaction of Gbeta(5)-RGS7 with the M3R. We found that these mutations facilitated binding of Gbeta(5)-RGS7 to the recombinant third intracellular loop of the M3R but did not enhance its ability to inhibit M3R-mediated Ca(2+) mobilization. This led us to the idea that the M3R can effectively induce the Gbeta(5)-RGS7 dimer to open; such a mechanism would require a region of the receptor distinct from the third loop. Indeed, we found that the C-terminus of M3R interacts with Gbeta(5)-RGS7. Truncation of the C-terminus rendered the M3R insensitive to inhibition by wild-type Gbeta(5)-RGS7; however, the open mutant of Gbeta(5)-RGS7 was able to inhibit signaling by the truncated M3R. The GST fusion of the M3R C-tail could not bind to wild-type Gbeta(5)-RGS7 but could associate with its open mutant as well as with the separated recombinant DEP domain or Gbeta(5). Taken together, our data are consistent with the following model: interaction of the M3R with Gbeta(5)-RGS7 causes the DEP domain and Gbeta(5) to dissociate from each other and bind to the C-tail, and the DEP domain also binds to the third loop, thereby inhibiting M3R-mediated signaling.