The extracellular loop 3 (ECL3) of the mammalian gonadotropin-releasing hormone receptor (GnRH-R) contains an acidic amino acid (Glu(301) in the mouse GnRH-R) that confers agonist selectivity for Arg(8) in mammalian GnRH. It is proposed that a specific conformation of ECL3 is necessary to orientate the carboxyl side chain of the acidic residue for interaction with Arg(8) of GnRH, which is supported by decreased affinity for Arg(8) GnRH but not Gln(8) GnRH when an adjacent Pro is mutated to Ala. To probe the structural contribution of the loop domain to the proposed presentation of the carboxyl side chain, we synthesized a model peptide (CGPEMLNRVSEPGC) representing residues 293-302 of mouse ECL3, where Cys and Gly residues are added symmetrically at the N and C termini, respectively, allowing the introduction of a disulfide bridge to simulate the distances at which the ECL3 is tethered to the transmembrane domains 6 and 7 of the receptor. The ability of the ECL3 peptide to bind GnRH with low affinity was demonstrated by its inhibition of GnRH stimulation of inositol phosphate production in cells expressing the GnRH-R. The CD bands of the ECL3 peptides exhibited a superposition of predominantly unordered structure and partial contributions from beta-sheet structure. Likewise, the analysis of the amide I and amide III bands from micro-Raman and FT Raman experiments revealed mainly unordered conformations of the cyclic and of the linear peptide. NMR data demonstrated the presence of a beta-hairpin among an ensemble of largely disordered structures in the cyclic peptide. The location of the turn linking the two strands of the hairpin was assigned to the three central residues L(296), N(297), and R(298). A small population of structured species among an ensemble of predominantly random coil conformation suggests that the unliganded receptor represents a variety of structural conformers, some of which have the potential to make contacts with the ligand. We propose a mechanism of receptor activation whereby binding of the agonist to the inactive receptor state induces and stabilizes a particular structural state of the loop domain, leading to further conformational rearrangements across the transmembrane domain and signal propagating interaction with G proteins. Interaction of the Glu(301) of the receptor with Arg(8) of GnRH induces a folded configuration of the ligand. Our proposal thus suggests that conformational changes of both ligand and receptor result from this interaction.