Cloning and sequencing of the murine chromosomal region XB harboring the murine vasopressin V(2) receptor (mV(2)R) gene and comparison with the orthologous human Xq28 region harboring the human vasopressin V(2) receptor (hV(2)R) revealed conservation of the genomic organization and a high degree of sequence identity in the V(2)R coding regions. Despite an identity of 87% of the amino acid sequences, both receptors show marked functional differences upon stable expression in Chinese hamster ovary cells: the mV(2)R displayed a 5-fold higher affinity for [(3)H]AVP than the human ortholog; similar differences were found for the AVP-mediated activation of adenylyl cyclase. Saturation binding experiments with transiently transfected intact COS.M6 cells showed that the mV(2)R was 3- to 5-fold less abundantly expressed at the cell surface than the hV(2)R. Laser scanning microscopy of fusion proteins consisting of the V(2)Rs and green fluorescent protein (GFP) (mV(2)R/GFP, hV(2)R/GFP) demonstrated that the hV(2)R/GFP was efficiently transported to the plasma membrane, whereas the mV(2)R/GFP was localized mainly within the endoplasmic reticulum. Chimeric hV(2)Rs, in which the first and/or second extracellular loop(s) were replaced by the corresponding loop(s) of the mV(2)R, revealed that the second extracellular loop accounts for the differences in ligand binding, but the first extracellular loop accounts for the reduced cell surface expression. The exchange of lysine 100 by aspartate in the first extracellular loop of hV(2)R was sufficient to reduce cell surface expression, which was accompanied by intracellular retention as observed in laser scanning microscopy analysis. Conversely, the exchange of aspartate 100 by lysine in the mV(2)R increased the cell surface expression and resulted in predominant plasma membrane localization. Thus, a single amino acid difference in the first extracellular loop between mV(2)R and hV(2)R determines the efficiency of cell surface expression.