The acidic pharmacophores of selective ligands bind to Lys199 and His256 of the AT1 receptor (Noda, K., Saad, Y., Kinoshita, A., Boyle, T. P., Graham, R. M., Husain, A., and Karnik, S. (1995) J. Biol. Chem. 270, 2284-2289). In this report we examine how interactions between these residues and agonists activate inositol phosphate production in transiently transfected COS-1 cells. [Sar1] angiotensin (Ang II) II and [Sar1]Ang II-amide stimulated a 5-fold inositol phosphate response from wild-type AT1 receptor. The peptide antagonist [Sar1,Ile8]Ang II and the non-peptide agonist L-162,313 produced a partial but saturating response. Stimulation of wild-type receptor by [Sar1]Ang II-amide and the mutant K199Q and K199A receptors by [Sar1]Ang II demonstrates that AT1 receptor activation is not critically dependent on the ion-pairing of the alpha-COOH group of Ang II with Lys199. The mutation of His256 produced diminished inositol phosphate response without commensurate change in binding affinity of ligands. The His256 side chain is critical for maximal activation of the AT1 receptor, although isosteric Gln substitution is sufficient for preserving the affinity for Phe8-substituted analogues of [Sar1]Ang II. Therefore, AT1 receptor activation requires interaction of Phe8 side chain of Ang II with His256, which is achieved by docking the alpha-COOH group of Phe8 to Lys199. Furthermore, non-peptide agonists interact with Lys199 and His256 in a similar fashion.