Evidence is presented for a role of disulfide bridging in forming the ligand binding site of the beta 2-adrenergic receptor (beta AR). The presence of disulfide bonds at the ligand binding site is indicated by "competitive" inhibition by dithiothreitol (DTT) in radioligand binding assays, by specific protection by beta-adrenergic ligands of these effects, and by the requirement of disulfide reduction for limit proteolysis of affinity ligand labeled receptor. The kinetics of binding inhibition by DTT suggest at least two pairs of disulfide-bonded cysteines essential for normal binding. Through site-directed mutagenesis, we indeed were able to identify four cysteines which are critical for normal ligand binding affinities and for the proper expression of functional beta AR at the cell surface. Unexpectedly, the four cysteines required for normal ligand binding are not those located within the hydrophobic transmembrane domains of the receptor (where ligand binding is presumed to occur) but lie in the extracellular hydrophilic loops connecting these transmembrane segments. These findings indicate that, in addition to the well-documented involvement of the membrane-spanning domains of the receptor in ligand binding, there is an important and previously unsuspected role of the hydrophilic extracellular domains in forming the ligand binding site.