We have previously described a cDNA which encodes a binding site with the pharmacology of the D2-dopamine receptor (Bunzow, J. R., VanTol, H. H. M., Grandy, D. K., Albert, P., Salon, J., Christie, M., Machida, C., Neve, K. A., and Civelli, O. (1988) Nature 336, 783-787). We demonstrate here that this protein is a functional receptor, i.e. it couples to G-proteins to inhibit cAMP generation and hormone secretion. The cDNA was expressed in GH4C1 cells, a rat somatomammotrophic cell strain which lacks dopamine receptors. Stable transfectants were isolated and one clone, GH4ZR7, which had the highest levels of D2-dopamine receptor mRNA on Northern blot, was studied in detail. Binding of D2-dopamine antagonist [3H]spiperone to membranes isolated from GH4ZR7 cells was saturable, with KD = 96 pM, and Bmax = 2300 fmol/mg protein. Addition of GTP/NaCl increased the IC50 value for dopamine competition for [3H]spiperone binding by 2-fold, indicating that the D2-dopamine receptor interacts with one or more G-proteins. To assess the function of the dopamine-binding site, acute biological actions of dopamine were characterized in GH4ZR7 cells. Dopamine, at concentrations found in vivo, decreased resting intra- and extracellular cAMP levels (EC50 = 8 +/- 2 nM) by 50-70% and blocked completely vasoactive intestinal peptide (VIP) induced enhancement of cAMP levels (EC50 = 6 +/- 1 nM). Antagonism of dopamine-induced inhibition of VIP-enhanced cAMP levels by spiperone, (+)-butaclamol, (-)-sulpiride, and SCH23390 occurred at concentrations expected from KI values for these antagonists at the D2-receptor and was stereoselective. Dopamine (as well as several D2-selective agonists) inhibited forskolin-stimulated adenylate cyclase activity by 45 +/- 6%, with EC50 of 500-800 nM in GH4ZR7 membranes. Dopaminergic inhibition of cellular cAMP levels and of adenylyl cyclase activity in membrane preparations was abolished by pretreatment with pertussis toxin (50 ng/ml, 16 h). Dopamine (200 nM) abolished VIP- and thyrotropin-releasing hormone-induced acute prolactin release. These data show conclusively that the cDNA clone encodes a functional dopamine-D2 receptor which couples to G-proteins to inhibit adenylyl cyclase and both cAMP-dependent and cAMP-independent hormone secretion.