G protein-coupled receptors (GPCR) represent the single most important drug targets for medical therapy, and information from genome sequencing and genomic data bases has substantially accelerated their discovery. The lack of a systematic approach either to identify the function of a new GPCR or to associate it with a cognate ligand has added to the growing number of orphan receptors. In this work we provide a novel approach to this problem using a beta-arrestin2/green fluorescent protein conjugate (beta arr2-GFP). It provides a real-time and single cell based assay to monitor GPCR activation and GPCR-Gr protein-coupled receptor kinase or GPCR-arrestin interactions, Confocal microscopy demonstrates the translocation of beta arr2-GFP to more than 15 different ligand-activated GPCRs, These data clearly support the common hypothesis that the beta-arrestin binding of an activated receptor is a convergent step of GPCR signaling, increase by 5-fold the number of GPCRs known to interact with beta-arrestins, demonstrate that the cytosol is the predominant reservoir of biologically active beta-arrestins, and provide the first direct demonstration of the critical importance of G protein-coupled receptor kinase phosphorylation to the biological regulation of beta-arrestin activity and GPCR signal transduction in living cells, The use of beta arr2-GFP as a biosensor to recog- nize the activation of pharmacologically distinct GPCRs should accelerate the identification of orphan receptors and permit the optical study of their signal transduction biology intractable to ordinary biochemical methods.