The R7 family of RGS proteins (RGS6, -7, -9, -11) is characterized by the presence of three domains: DEP, GGL, and RGS. The RGS domain interacts with Galpha subunits and exhibits GAP activity. The GGL domain permanently associates with Gbeta5. The DEP domain interacts with the membrane anchoring protein, R7BP. Here we provide evidence for a novel interaction within this complex: between the DEP domain and Gbeta5. GST fusion of the RGS7 DEP domain (GST-R7DEP) binds to both native and recombinant Gbeta5-RGS7, recombinant Gbetagamma complexes, and monomeric Gbeta5 and Gbeta1 subunits. Co-immunoprecipitation and FRET assays supported the GST pull-down experiments. GST-R7DEP reduced FRET between CFP-Gbeta5 and YFP-RGS7, indicating that the DEP-Gbeta5 interaction is dynamic. In transfected cells, R7BP had no effect on the Gbeta5/RGS7 pull down by GST-R7DEP. The DEP domain of RGS9 did not bind to Gbeta5. Substitution of RGS7 Glu-73 and Asp-74 for the corresponding Ser and Gly residues (ED/SG mutation) of RGS9 diminished the DEP-Gbeta5 interaction. In the absence of R7BP both the wild-type RGS7 and the ED/SG mutant attenuated muscarinic M3 receptor-mediated Ca2+ mobilization. In the presence of R7BP, wild-type RGS7 lost this inhibitory activity, whereas the ED/SG mutant remained active. Taken together, our results are consistent with the following model. The Gbeta5-RGS7 molecule can exist in two conformations: "closed" and "open", when the DEP domain and Gbeta5 subunit either do or do not interact. The closed conformation appears to be less active with respect to its effect on Gq-mediated signaling than the open conformation.