Members of the cytokine receptor family have a consensus WSXWS sequence (WS motif) in the extracellular domain. With the interleukin-2, erythropoietin, and prolactin receptors, alteration of the WS sequence disrupts ligand binding and receptor signaling. The structural basis for these effects is unclear. To examine the role of the WS equivalent sequence (Y222GEFS226) in the function of the growth hormone receptor, each residue was mutated to alanine or to the WS consensus sequence. Although we used stable cell lines expressing all of these mutants, we show only three mutants, Y222A, G223A, and S226A, which display lower ligand affinity. Using conformation-specific monoclonal antibodies, we show that Y222A and S226A receptors have structural perturbations, which result in decreased signal transduction. This was shown by a decreased ability of growth hormone to stimulate protein synthesis and to transactivate the c-fos promoter with these mutants. The crystal structure of the ligand-occupied extracellular domain of growth hormone receptor indicates that Tyr222 and Ser226 have important interactions within the second beta-barrel domain, providing a structural basis for our results. The WS segment is not involved in sequence-specific accessory protein interaction, as mutation of residues Gly223, Glu224, and Phe225 does not alter receptor function.