Serotonin receptors 5-HT(1A) and 5-HT(7) are highly coexpressed in brain regions implicated in depression. However, their functional interaction has not been established. In the present study we show that 5-HT(1A) and 5-HT(7) receptors form heterodimers both in vitro and in vivo. Foerster resonance energy transfer-based assays revealed that, in addition to heterodimers, homodimers composed either of 5-HT(1A) or 5-HT(7) receptors together with monomers coexist in cells. The highest affinity for complex formation was obtained for the 5-HT(7)-5-HT(7) homodimers, followed by the 5-HT(7)-5-HT(1A) heterodimers and 5-HT(1A)-5-HT(1A) homodimers. Functionally, heterodimerization decreases 5-HT(1A)-receptor-mediated activation of G(i) protein without affecting 5-HT(7)-receptor-mediated signalling. Moreover, heterodimerization markedly decreases the ability of the 5-HT(1A) receptor to activate G-protein-gated inwardly rectifying potassium channels in a heterologous system. The inhibitory effect on such channels was also preserved in hippocampal neurons, demonstrating a physiological relevance of heteromerization in vivo. In addition, heterodimerization is crucially involved in initiation of the serotonin-mediated 5-HT(1A) receptor internalization and also enhances the ability of the 5-HT(1A) receptor to activate the mitogen-activated protein kinases. Finally, we found that production of 5-HT(7) receptors in the hippocampus continuously decreases during postnatal development, indicating that the relative concentration of 5-HT(1A)-5-HT(7) heterodimers and, consequently, their functional importance undergoes pronounced developmental changes.