Many G-protein-coupled receptors display a rapid decrease in ligand binding following pretreatment with agonist. cAR1, a cAMP receptor expressed early in the developmental program of Dictyostelium, mediates chemotaxis, activation of adenylyl cyclase, and gene expression changes that bring about the aggregation of 10(5) amoebae to form a multicellular structure. Occupancy of cAR1 by cAMP initiates multiple desensitization processes, one of which is an apparent reduction in binding sites. In transformed cells expressing cAR1 constitutively, Scatchard analyses revealed that this apparent loss of ligand binding is largely due to a significant reduction in the affinity of cAR1 for cAMP. A parallel increase in the dose dependence of cAR1-mediated cAMP uptake was observed. Consistent with these findings, proteolysis of intact cells and immunofluorescence suggested that cAR1 remains on the cell-surface following cAMP treatment. Finally, agonist-induced loss of ligand binding is impaired in cAR1 mutants lacking a cluster of cytoplasmic serine residues, which are targets of cAMP-induced phosphorylation.