Visual arrestin is converted from a 'basal' state to an 'activated' state by interaction with the phosphorylated C-terminus of photoactivated rhodopsin (R*), but the conformational changes in arrestin that lead to activation are unknown. Small-angle X-ray scattering (SAXS) was used to investigate the solution structure of arrestin and characterize changes attendant upon activation. Wild-type arrestin forms dimers with a dissociation constant of 60 micro m. Small conformational changes, consistent with local movements of loops or the mobile N- or C-termini of arrestin, were observed in the presence of a phosphopeptide corresponding to the C-terminus of rhodopsin, and with an R175Q mutant. Because both the phosphopeptide and the R175Q mutation promote binding to unphosphorylated R*, we conclude that arrestin is activated by subtle conformational changes. Most of the arrestin will be in a dimeric state in vivo. Using the arrestin structure as a guide [Hirsch, J.A., Schubert, C., Gurevich, V.V. & Sigler, P.B. (1999) Cell 97, 257-269], we have identified a model for the arrestin dimer that is consistent with our SAXS data. In this model, dimerization is mediated by the C-terminal domain of arrestin, leaving the N-terminal domains free for interaction with phosphorylated R*.