The study of G protein-coupled receptor signal transduction and behavior in living cells is technically difficult because of a lack of useful biological reagents. We show here that a fully functional alphalb-adrenoceptor tagged with the green fluorescent protein (alphalbAR/GFP) can be used to determine the molecular mechanism of intemalization of alphalbAR/ GFP in living cells. In mouse alphaT3 cells, alpha1bAR/GFP demonstrates strong, diffuse fluorescence along the plasma membrane when observed by confocal laser scanning microscope. The fluorescent receptor binds agonist and antagonist and stimulates phosphatidylinositol/Ca2+ signaling in a similar fashion to the wild receptor. In addition, alpha1bAR/ GFP can be internalized within minutes when exposed to agonist, and the subcellular redistribution of this receptor can be determined by measurement of endogenous fluorescence. The phospholipase C inhibitor U73,122, the protein kinase C activator PMA, and inhibitor staurosporine, and the Ca2+-ATPase inhibitor thapsigargin were used to examine the mechanism of agonist-promoted alphalbAR/GFP redistribution. Agonist-promoted internalization of alphalbAR/GFP was closely linked to phospholipase C activation and was dependent on protein kinase C activation, but was independent of the increase in intracellular free Ca2+ concentration. This study demonstrated that real-time optical monitoring of the subcellular localization of alphalbAR (as well as other G protein-coupled receptors) in living cells is feasible, and that this may provide a valuable system for further study of the biochemical mechanism(s) of agonist-induced receptor endocytosis.