Arginine vasopressin modulates the release of adrenocorticotropic hormone, beta-endorphin, and prolactin from the anterior pituitary. Release is mediated by the V1b receptor through the mobilization of intracellular Ca2+ by phosphatidylinositol hydrolysis. In contrast to its well characterized peripheral actions, such as antidiuresis, contraction of vascular smooth muscle, and stimulation of hepatic glycogenolysis, the exact site and mechanism of vasopressin action in the pituitary remain unclear. This is largely due to a lack of information on the molecular identity and exact localization of the V1b receptor. This lack prompted us to try to isolate this receptor subtype. Here we report the molecular cloning and functional expression of a complementary DNA encoding the human V1b receptor. The deduced 424-amino acid sequence of the receptor has highest overall homology with the V1a, V2, and oxytocin receptors, with homologies of 45, 39, and 45%, respectively. The receptor expressed in COS-1 cells has a single binding site for arginine vasopressin with a Kd of 0.17 +/- 0.04 nM. It binds various agonists and antagonists of vasopressin with affinities distinct from those of V1a and V2 receptors but consistent with those anticipated for the V1b receptor on the basis of the pharmacological studies. Furthermore, arginine vasopressin evoked calcium-dependent chloride current in Xenopus oocytes transfected with the receptor, which was not affected by a V1a/V2 antagonist. In contrast, the current evoked in oocytes transfected with V1a receptor was abolished by the antagonist. Northern blot analysis revealed that the receptor expression is restricted to the pituitary. These data clearly indicate that the cloned cDNA encodes the V1b receptor.