Down-regulation of the Ins(1,4,5)P₃ receptor is an adaptive response to the activation of certain phosphoinositidase C-linked cell-surface receptors. It is manifested as a profound decline in cellular Ins(1,4,5)P₃ receptor content, occurs with a half-time of 0.5-2 h and is due to accelerated proteolysis. It has been shown that this process is mediated by the ubiquitin/proteasome pathway and is therefore initiated by Ins(1,4,5)P₃ receptor ubiquitination. To investigate the role of ligand binding in Ins(1,4,5)P₃ receptor ubiquitination, we expressed ‘exogenous’ wild-type and ligand-binding-defective mutant type I Ins(1,4,5)P₃ receptors in human neuroblastoma SH-SY5Y cells, in which muscarinic receptor activation elicits Ins(1,4,5)P₃ receptor down-regulation. We found (1) that exogenous wild-type Ins(1,4,5)P₃ receptors are efficiently ubiquitinated in response to muscarinic receptor stimulation, (2) that exogenous ligand binding-defective mutant Ins(1,4,5)P₃ receptors are resistant to ubiquitination, (3) that this resistance is not caused by the removal of potential ubiquitin-conjugating sites in the mutated region, and (4) that in heterotetramers of exogenous mutant receptors and ‘endogenous’ receptors, only the latter are targeted for ubiquitination. These results indicate that the binding of Ins(1,4,5)P₃ directly stimulates ubiquitination of the Ins(1,4,5)P₃ receptor and that the targeting of Ins(1,4,5)P₃ receptors for ubiquitination is a highly specific process. We therefore propose that an Ins(1,4,5)P₃-binding-induced conformational change in the receptor exposes a degradation signal that leads to ubiquitination.