The present study tests the hypothesis that the unique intracellular third loop domain of angiotensin II type-2 (AT2) receptor is essential for the subsequent intracellular signaling and plays an important role in mediating receptor function. Synthetic intracellular third loop peptide of the AT2 receptor (AT2-3LP, 22 amino acids) and control peptide consisting of the same amino acid composition in random sequence were delivered into adult rat aortic vascular smooth muscle cells by cationic liposome-mediated transfection. Successful intracellular peptide delivery was confirmed by microscopic localization of the fluorescein-labeled AT2-3LP within the cells and also by co-immunoprecipitation of the 125I-labeled 3LP complexed with Gi protein using anti-Gialpha antibody. The AT2-3LP-transfected cells showed reduction of serum-stimulated DNA synthesis and cell proliferation as well as a decrease in mitogen-activated protein kinase activity, simulating the effects of AT2 receptor stimulation. The antagonistic effect of the AT2-3LP on mitogen-activated protein kinase activity and DNA synthesis were reversed by pertussis toxin and sodium orthovanadate. Thus, our data suggest that the intracellular third loop domain of the AT2 receptor is closely linked with the cellular signaling pathways of vascular smooth muscle cells in which Gi and protein-phosphotyrosine phosphatase are involved, resulting in the alteration of mitogen-activated protein kinase activity and in growth inhibition.