Posttranslational processing of the TSH receptor (TSHR) involves proteolysis of a single chain holoreceptor into TSHR-alpha (or A) and TSHR-beta (or B) subunits, which remain associated via disulfide bonds and which may then form oligomers. As both uncleaved and cleavage-derived forms of this receptor have been reported to bind TSH and transduce signals, reasons for this cleavage into alpha- and beta-subunits have remained enigmatic. Recently we suggested that TSHR cleavage was related to receptor oligomerization and now we have asked if cleavage influenced the binding of G proteins to this receptor. Furthermore, as TSHR-alpha subunits are subject to shedding from the cell surface membrane, we have examined whether the remaining TSHR-beta subunits could mediate signaling themselves, either constitutively and /or ligand-induced. We found that only the cleaved form of the TSHR in transfected Chinese hamster ovary cells was able to bind Gsalpha protein, suggesting that cleavage of the native TSH receptor was associated with receptor activation. We also found that independently expressed TSHR-beta subunits on stable cell lines were unable to mediate either constitutive or TSH-induced signaling, as monitored by their inability to induce cAMP accumulation. These data suggested that receptor cleavage was intimately associated with receptor activation in the wild-type TSH receptor and that the residual TSHR-beta subunits left on the thyroid cell membrane, after TSHR cleavage and subsequent TSHR-alpha shedding, were essentially silent and did not participate in signal transduction.