To investigate further the relationship of angiotensin I-converting enzyme (ACE) inhibitors to activation of the B(2) bradykinin (BK) receptor, we transfected Chinese hamster ovary cells to stably express the human receptor and either wild-type ACE (WT-ACE), an ACE construct with most of the cytosolic portion deleted (Cyt-del-ACE), or ACE with a glycosylphosphatidylinositol (GPI) anchor replacing the transmembrane and cytosolic domains (GPI-ACE). BK or its ACE-resistant analogue were the agonists. All activities (arachidonic acid release and calcium mobilization) were blocked by the B(2) antagonist HOE 140. B(2) was desensitized by repeated administration of BK but resensitized to agonist by ACE inhibitors in the cells expressing both B(2) and either WT-ACE or Cyt-del-ACE. In GPI-ACE expressing cells, the B(2) receptor was still activated by the agonists, but ACE inhibitors did not resensitize. Pretreatment with filipin returned the sensitivity to inhibitors. In immunocytochemistry, GPI-ACE showed patchy, uneven distribution on the plasma membrane that was restored by filipin. Thus, ACE inhibitors were inactive as long as GPI-ACE was sequestered in cholesterol-rich membrane domains. WT-ACE and B(2) receptor in Chinese hamster ovary cells co-immunoprecipitated with antibody to receptor, suggesting an interaction on the cell membrane. ACE inhibitors augment BK effects on receptors indirectly only when enzyme and receptor molecules are sterically close, possibly forming a heterodimer.