Leucine-rich repeat-containing, G protein-coupled receptors (LGRs) represent a unique subgroup of G protein-coupled receptors with a large ectodomain. Recent studies demonstrated that relaxin activates two orphan LGRs, LGR7 and LGR8, whereas INSL3/Leydig insulin-like peptide specifically activates LGR8. Human relaxin 3 (H3 relaxin) was recently discovered as a novel ligand for relaxin receptors. Here, we demonstrate that H3 relaxin activates LGR7 but not LGR8. Taking advantage of the overlapping specificity of these three ligands for the two related LGRs, chimeric receptors were generated to elucidate the mechanism of ligand activation of LGR7. Chimeric receptor LGR7/8 with the ectodomain from LGR7 but the transmembrane region from LGR8 maintains responsiveness to relaxin but was less responsive to H3 relaxin based on ligand stimulation of cAMP production. The decreased ligand signaling was accompanied by decreases in the ability of H3 relaxin to compete for (33)P-relaxin binding to the chimeric receptor. However, replacement of the exoloop 2, but not exoloop 1 or 3, of LGR7 to the chimeric LGR7/8 restored ligand binding and receptor-mediated cAMP production. These results suggested that activation of LGR7 by H3 relaxin involves specific binding of the ligand to both the ectodomain and the exoloop 2, thus providing a model with which to understand the molecular basis of ligand signaling for this unique subgroup of G protein-coupled receptors.