Oligomerization of G protein-coupled receptors is commonly observed, but the functional significance of oligomerization for this diverse family of receptors remains poorly understood. We used bioluminescence resonance energy transfer ( BRET) to examine oligomerization of Ste2p, a G protein-coupled receptor that serves as the receptor for the alpha-mating pheromone in the yeast Saccharomyces cerevisiae, under conditions where the functional effects of oligomerization could be examined. Consistent with previous results from fluorescence resonance energy transfer ( Overton, M. C., and Blumer, K. J. ( 2000) Curr. Biol. 10, 341 - 344), we detected efficient energy transfer between Renilla luciferase and a modified green fluorescent protein individually fused to truncated alpha-factor receptors lacking the cytoplasmic C- terminal tail. In addition, the low background of the BRET system allowed detection of significant, but less efficient, energy transfer between full-length receptors. The reduced efficiency of energy transfer between full-length receptors does not appear to result from different levels of receptor expression. Instead, attachment of fluorescent reporter proteins to the full-length receptors appears to significantly increase the distance between reporters. Mutations that were previously reported to block dimerization of truncated alpha-factor receptors reduce but do not completely eliminate BRET transfer between receptors. Dominant negative effects of mutant alleles of alpha-factor receptors appear to be mediated by receptor oligomerization since these effects are abrogated by introduction of additional mutations that reduce oligomerization. We find that heterodimers of normal and dominant negative receptors are defective in their ability to signal. Thus, signal transduction by oligomeric receptors appears to be a cooperative process requiring an interaction between functional monomers.