Synthesis, processing and agonist-induced modifications of the V2 vasopressin receptor were examined in stably or transiently transfected HEK293 cells. Metabolic labeling with S methionine for 30 min revealed a predominant precursor protein which subsequently gave rise to the mature receptor on the cell surface. Maturation of the receptor was unrelated to glycosylation suggesting that it was the consequence of protein refolding. In addition to monomeric forms of V2 receptor protein, oligomers of the precursor protein were also detected in SDS-PAGE. These oligomers seemed to be dimers and tetrameres, and were more apparent in transiently transfected cells that produced higher quantities of protein then stably transfected cells. No oligomers of the mature receptor were detected, and co-transfection of the wild type with a mutant V2 receptor lacking G-protein coupling activity did not alter the function of the wild type receptor. These results indicated that the formation of oligomeric was most likely a consequence of overproduction of the protein and not a required step for receptor function. Addition of vasopressin promoted phosphorylation and sequestration of the wild type receptor, and of the R137H mutant receptor which lacks coupling to G proteins. Activation of protein kinases A or C did not result in phosphorylation of un-occupied receptor. Phosphate incorporated into the protein was stable in the continuous presence of the ligand despite sequestration of the receptor protein. Deletion of the last 14 amino acids abolished receptor phosphorylation but not sequestration and desensitization, indicating that these two processes are not dependent on protein phosphorylation. Additionally, phosphorylation and sequestration of the R137H mutant receptor revealed that phosphorylation and sequestration does not require coupling to Gs. The wild type V2 vasopressin receptor was found to be palmitoylated at two cysteines at the carboxyl terminus. Either cysteine could be palmitoylated independently of each other and the presence of at least one was required to obtain receptor expression similar to the wild type. The turnover of the palmitic acid incorporated into the receptor was not altered by the addition of vasopressin demonstrating that this post-translational modification of the receptor was not altered by the ligand-promoted phosphorylation of the protein.