The beta2-adrenergic receptor (beta2AR) is prototypic of the large family of G protein-coupled receptors (GPCRs) whose desensitization and resensitization are regulated by intracellular kinases, arrestin proteins, phosphatases, and ill-defined components of the cellular endocytic machinery. The study of beta2AR signal transduction and behavior in living cells is technically difficult because of the relatively low cellular expression of the receptor and a lack of useful biological reagents. Availability of a functional beta2AR tagged with the highly sensitive Green Fluorescent Protein (GFP) could allow measurements of the various properties of the beta2AR. We demonstrate that a fully functional beta2AR/GFP can be engineered. In mammalian cells, beta2AR/S65T/GFP demonstrates strong, diffuse plasma membrane fluorescence when observed with 480 nm excitation. The fluorescent receptor binds agonist and antagonist, stimulates adenylyl cyclase, undergoes phosphorylation, and is internalized in a manner indistinguishable from wild-type receptor. We then show that its internal trafficking and surface mobility can be determined by measuring only the endogenous fluorescence of the conjugate. beta2AR/S65T/GFP was found to be localized on endosomal membranes in living cells within minutes of agonist treatment, and within 15 min it is observed in more complicated structures formed from fusion of multiple endosomes. Finally, its free diffusion (diffusion coefficient, 4.0-12 x 10(-9) cm2/sec) was assessed on living cells using photobleaching recovery measurements. This approach and the fidelity of the biochemical properties of the beta2AR/S65T/GFP demonstrate that real-time optical measurements of beta2AR (as well as other GPCR) interactions and dynamics on living cells are feasible.