Alanine mutagenesis scanning of the intracellular portion of the human muscarinic cholinergic Hm1 receptor was performed to identify domains mediating agonist induced receptor sequestration. Using these multiple alanine point mutants of Hm1, we had previously identified several receptor domains in the intracellular loops i1-3 that play a role in coupling to phosphatidyl inositol turnover, most notably, a lipophilic residue, Leu-131, in the conserved i2 loop domain DRYXXVXXPL (Moro, O., Lameh, J., Hogger, P, and Sadee, W. (1993) J. Biol. Chem. 268, 6862-6865). We now demonstrate that; alanine substitutions in three of these domains, i.e. middle of the i2 loop and both junctions of the i3 loop, also result in defective sequestration (loss of surface receptor sites accessible to a polar tracer) in transfected human kidney U293 cells. The i2 loop was studied further by single point mutations. The strongest impairment of sequestration occurred with mutant L131A which was also highly defective in phosphatidyl inositol (PI) coupling. Substitution of Leu-131 with several distinct amino acids indicated that a bulky lipophilic residue is required for sequestration in this position, as shown for coupling to PI turnover. Further, the double point mutation, V127A/L131A, almost completely suppressed both sequestration and coupling of Hm1, In the beta(2) adrenoceptor, alanine substitution of the i2 residue Phe-139, equivalent to Leu-131 in Hm1, also resulted in impaired coupling to adenylyl cyclase and sequestration, indicating a general role for this conserved i2 loop residue in both processes. The combined results show that the multi-site domain involved in signal transduction of Hm1 is similar to and overlaps with that involved in sequestration. However, three Hm1 mutants that were moderately deficient in stimulating PI turnover displayed normal sequestration, suggesting distinct mechanisms. We propose that cellular mediators of receptor sequestration are structurally similar or identical to the heterotrimeric G proteins.