C-type natriuretic peptide (CNP) is a newly discovered factor that stimulates vasorelaxation and inhibits cell proliferation. Natriuretic peptide receptor-B (NPR-B) is the primary signaling molecule for CNP. Recently, the guanylyl cyclase activity of NPR-B was shown to correlate with its phosphorylation state, and it was suggested that receptor dephosphorylation is a mechanism of desensitization. We now report the identification and characterization of the major NPR-B phosphorylation sites. Mutagenesis and comigration studies using synthetic phosphopeptides were employed to identify five residues (Ser-513, Thr-516, Ser-518, Ser-523, and Ser-526) within the kinase homology domain that are phosphorylated when NPR-B is expressed in human 293 cells. Mutation of any of these residues to alanine reduced the receptor's phosphorylation state and CNP-dependent guanylyl cyclase activity. The reductions were not explained by decreases in receptor protein level as indicated by immunoblot analysis and determinations of cyclase activity in the absence of CNP or in the presence of detergent. Elimination of all of the phosphorylation sites resulted in a completely dephosphorylated receptor whose CNP-dependent cyclase activity was decreased by >90%. However, unlike NPR-A, the dephosphorylated receptor was not completely unresponsive to hormone. Finally, two additional residues (Gly-521 and Ser-522) were identified that when mutated to alanine reduced the overall phosphorylation state and hormone responsiveness of the receptor without abolishing the phosphorylation of a specific site. These data indicate that phosphorylation of the kinase homology domain is a critical event in the regulation of NPR-B.