Regulators of G protein signaling (RGS) make up a diverse family primarily known as GTPase-activating proteins (GAPs) for heterotrimeric G proteins. In addition to the RGS domain, which is responsible for GAP activity, most RGS proteins contain other distinct structural motifs. For example, members of the R7 family of RGS proteins contain a DEP, GGL, and novel DHEX domain and are obligatory dimers with G protein beta subunit Gbeta5. Here we show that the Gbeta5-RGS7 complex can inhibit Ca2+ mobilization elicited by muscarinic acetylcholine receptor type 3 (M3R), but not by other Gq-coupled receptors such as M1, M5, histamine H1, and GNRH receptors. The isolated DEP domain of RGS7 is sufficient for the inhibition of M3R signaling, whereas the deletion of the DEP domain renders the Gbeta5-RGS7 complex ineffective. Deletion of a portion of the third intracellular loop allowed the receptor (M3R-short) to signal but rendered it insensitive to the effect of the Gbeta5-RGS7 complex. Accordingly, the recombinant DEP domain bound in vitro to the GST-fused i3 loop of the M3R. These results identify a novel molecular mechanism that can impart receptor subtype selectivity on signal transduction via Gq-coupled muscarinic receptors.