We have previously shown that rat LH receptors (LHRs) occupied by human CG (hCG) exhibit slow receptor lateral diffusion and are self-associated. Here we have examined whether LHRs become self-associated and enter slowly diffusing structures in response to hormone binding and whether these receptors retain this organization while in the desensitized state. Before hormone exposure, wild-type rat LHRs coupled at the C terminus to enhanced green fluorescent protein (GFP-LHR-wt) exhibited fast lateral diffusion, as assessed by fluorescent photobleaching recovery (FPR) methods, and most receptors were laterally mobile. After 30 min exposure to hCG and subsequent removal of hormone by low pH wash, hormone challenge at any time within the next 4 h produced no increase in cellular cAMP levels. During this time, LHRs were either laterally immobile or exhibited slower lateral diffusion. When LHRs were again responsive to binding of hormone, the rate of receptor lateral diffusion had become significantly faster and the fraction of mobile receptors was again large. Desensitized LHRs were also self-associated and present in microscopically visible clusters on the plasma membrane. Fluorescence energy transfer (FET) methods were used to measure the extent of interaction between receptors coupled to either GFP or to yellow fluorescent protein (YFP). Before hormone treatment, there was essentially no energy transfer between LHRs. After desensitization of the receptors by 30 min exposure to hCG, energy transfer efficiency increased to 18%. Values for FET efficiency between desensitized receptors decreased over time, and receptors were responsive to hormone only after measurable energy transfer had completely disappeared. Together these results suggest that desensitized LHRs exist in large, slowly diffusing structures containing self-associated receptors and that these structures must dissipate before the receptor can again respond to hormone.