We have investigated receptor structural components of the melanocortin-4 receptor (MC4R) responsible for ligand-dependent inverse agonism. We utilized agouti-related protein (AGRP), an inverse agonist which reduces MC4R basal cAMP production, as a tool to determine the molecular mechanism. We tested a series of chimeric receptors and utilized MC4R and MC1R as templates, in which AGRP is an inverse agonist for MC4R but not for MC1R. Our results indicate that replacements of the extracellular loops 1, 2 and 3 of MC4R with the corresponding regions of MC1R did not affect AGRP inverse agonist activity. However, replacement of the N terminus of MC4R with the same region of MC1R decreases AGRP inverse agonism. Replacement of transmembrane domains 3, 4, 5 and 6 of MC4R with the corresponding regions of MC1R did not affect AGRP inverse agonist activity but mutation of D90A in transmembrane 2 (TM2) and D298A in TM7 abolished AGRP inverse activity. Deletion of the distal MC4R C terminus fails to maintain AGRP mediated reduction in basal cAMP production although it maintains NDP-MSH mediated cANIP production.