The parathyroid hormone (PTH)-2 receptor displays strong ligand selectivity in that it responds fully to PTH but not at all to PTH-related peptide (PTHrP). In contrast, the PTH-1 receptor (PTH/PTHrP receptor) responds fully to both ligands. Previously it was shown that two divergent residues in PTH and PTHrP account for PTH-2 receptor selectivity; position 23 (Trp in PTH and Phe in PTHrP) determines binding selectivity and position 5 (Ile in PTH and His in PTHrP) determines signaling selectivity. To identify sites in the PTH-2 receptor involved in discriminating between His5 and Ile5, we constructed PTH-2 receptor/PTH-1 receptor chimeras, expressed them in COS-7 cells, and tested for cAMP responsiveness to [Trp23] PTHrP-(1-36), and to the nondiscriminating peptide [Ile5, Trp23]PTHrP-(1-36) (the Phe23 --> Trp modification enabled high affinity binding of each ligand to the PTH-2 receptor). The chimeras revealed that the membrane-spanning/loop region of the receptor determined His5/Ile5 signaling selectivity. Subsequent analysis of smaller cassette substitutions and then individual point mutations led to the identification of two single residues that function as major determinants of residue 5 signaling selectivity. These residues, Ile244 at the extracellular end of transmembrane helix 3, and Tyr318 at the COOH-terminal portion of extracellular loop 2, are replaced by Leu and Ile in the PTH-1 receptor, respectively. The results thus indicate a functional interaction between two residues in the core region of the PTH-2 receptor and residue 5 of the ligand.