Of the five mammalian muscarinic acetylcholine (ACh) receptors, M(5) is the only subtype expressed in midbrain dopaminergic neurons, where it functions to potentiate dopamine release. We have identified a direct physical interaction between M(5) and the AP-3 adaptor complex regulator AGAP1. This interaction was specific with regard to muscarinic receptor (MR) and AGAP subtypes, and mediated the binding of AP-3 to M(5). Interaction with AGAP1 and activity of AP-3 were required for the endocytic recycling of M(5) in neurons, the lack of which resulted in the downregulation of cell surface receptor density after sustained receptor stimulation. The elimination of AP-3 or abrogation of AGAP1-M(5) interaction in vivo decreased the magnitude of presynaptic M(5)-mediated dopamine release potentiation in the striatum. Our study argues for the presence of a previously unknown receptor-recycling pathway that may underlie mechanisms of G-protein-coupled receptor (GPCR) homeostasis. These results also suggest a novel therapeutic target for the treatment of dopaminergic dysfunction.