A number of studies have suggested that G protein-coupled receptors possess domains within the carboxyl terminus that are important for the catalytic activation of G proteins. To define these regions, truncation mutants were generated in the cDNA of bovine rhodopsin, the receptor responsible for visual signal transduction in the retinal rod cell. The mutants were expressed in HEK-293 cells and analyzed for their ability to bind the chromophore, 11-cis-retinal, and for activating Gt, the G protein of the rod cell regulated by rhodopsin. Removal of 38 carboxyl-terminal amino acids resulted in the production of a mutant (K311 stop) that does not bind 11-cis-retinal, has an abnormal pattern of glycosylation, and does not catalyze light-dependent binding of GTP gamma S to Gt, suggesting that it is unable to fold properly during biogenesis. However, a truncation mutant with only five additional amino acids (C316stop) coupled normally to Gt, using membranes from transfected cells, despite the fact that it lacked the "fourth cytoplasmic loop" formed by palmitoylation of cysteines-322 and -323. When C316stop is extracted from the membrane with detergent, only a fraction is able to bind 11-cis-retinal, but the fraction that binds retinal activates Gt normally. In contrast, detergent-solubilized wild-type rhodopsin and K325stop (a truncation mutant with the longest carboxyl terminus) both bind retinal and activate Gt normally. These data suggest that the proximal region of the carboxyl terminus is critical for the proper folding and stability of the rhodopsin molecule and that amino acids Cys316 to Ala348 are not necessary for the activation of Gt.