The recombinant Pm2 muscarinic receptor expressed in Chinese hamster ovary (CHO) cells was used as a model system to examine receptor-effector coupling and ligand binding. In CHO cells, equilibrium binding studies and the dependence on receptor number per cell of the maximum response and EC50 values for agonist stimulation of phosphatidylinositol metabolism and inhibition of cAMP formation were consistent with a modified ternary complex model of signal transduction that included a physiologically noncompetent receptor state. Detailed kinetic studies of oxotremorine M (Oxo-M) binding to CHO cell membranes suggested that agonist interactions at the high affinity class of binding sites are complicated and depend on receptor expression levels. At low levels of expression, kinetic data were consistent with a special case of a mechanism in which Oxo-M shifts the equilibrium between two receptor conformations while at high levels of expression, it was necessary to evoke receptor-receptor interactions to explain the kinetic data. Far ultraviolet circular dichroism studies of the purified recombinant receptor showed a high content of alpha-helical secondary structure and small changes in secondary structure upon antagonist, but not agonist, binding.