To determine the structural and regulatory role of the C-terminal residues of phospholamban (PLB) in the membranes of living cells, we fused fluorescent protein tags to PLB and sarco/endoplasmic reticulum calcium ATPase (SERCA). Alanine substitution of PLB C-terminal residues significantly altered fluorescence resonance energy transfer (FRET) from PLB to PLB and SERCA to PLB, suggesting a change in quaternary conformation of PLB pentamer and SERCA-PLB regulatory complex. Val to Ala substitution at position 49 (V49A) had particularly large effects on PLB pentamer structure and PLB-SERCA regulatory complex conformation, increasing and decreasing probe separation distance, respectively. We also quantified a decrease in oligomerization affinity, an increase in binding affinity of V49A-PLB for SERCA, and a gain of inhibitory function as quantified by calcium-dependent ATPase activity. Notably, deletion of only a few C-terminal residues resulted in significant loss of PLB membrane anchoring and mislocalization to the cytoplasm and nucleus. C-terminal truncations also resulted in progressive loss of PLB-PLB FRET due to a decrease in the apparent affinity of PLB oligomerization. We quantified a similar decrease in the binding affinity of truncated PLB for SERCA and loss of inhibitory potency. However, despite decreased SERCA-PLB binding, intermolecular FRET for Val(49)-stop (V49X) truncation mutant was paradoxically increased as a result of an 11.3-Å decrease in the distance between donor and acceptor fluorophores. We conclude that PLB C-terminal residues are critical for localization, oligomerization, and regulatory function. In particular, the PLB C terminus is an important determinant of the quaternary structure of the SERCA regulatory complex.