By combining a Drosophila genome data base search and reverse transcriptase-PCR-based cDNA isolation, two G-protein-coupled receptors were cloned, which are the closest known invertebrate homologs of the mammalian opioid/somatostatin receptors. However, when functionally expressed in Xenopus oocytes by injection of Drosophila orphan receptor RNAs together with a coexpressed potassium channel, neither receptor was activated by known mammalian agonists. By applying a reverse pharmacological approach, the physiological ligands were isolated from peptide extracts from adult flies and larvae. Edman sequencing and mass spectrometry of the purified ligands revealed two decapentapeptides, which differ only by an N-terminal pyroglutamate/glutamine. The peptides align to a hormone precursor sequence of the Drosophila genome data base and are almost identical to allatostatin C from Manduca sexta. Both receptors were activated by the synthetic peptides irrespective of the N-terminal modification. Site-directed mutagenesis of a residue in transmembrane region 3 and the loop between transmembrane regions 6 and 7 affect ligand binding, as previously described for somatostatin receptors. The two receptor genes each containing three exons and transcribed in opposite directions are separated by 80 kb with no other genes predicted between. Localization of receptor transcripts identifies a role of the new transmitter system in visual information processing as well as endocrine regulation.