Adhesion G protein-coupled receptors (aGPCRs) comprise the second largest yet least studied class of the GPCR superfamily. aGPCRs are involved in many developmental processes and immune and synaptic functions, but the mode of their signal transduction is unclear. Here, we show that a short peptide sequence (termed the Stachel sequence) within the ectodomain of two aGPCRs (GPR126 and GPR133) functions as a tethered agonist. Upon structural changes within the receptor ectodomain, this intramolecular agonist is exposed to the seven-transmembrane helix domain, which triggers G protein activation. Our studies show high specificity of a given Stachel sequence for its receptor. Finally, the function of Gpr126 is abrogated in zebrafish with a mutated Stachel sequence, and signaling is restored in hypomorphic gpr126 zebrafish mutants upon exogenous Stachel peptide application. These findings illuminate a mode of aGPCR activation and may prompt the development of specific ligands for this currently untargeted GPCR family.