Fibroblast growth factor-21 (FGF21) signaling requires the presence of beta-Klotho, a co-receptor with a very short cytoplasmic domain. Here we show that FGF21 binds directly to beta-Klotho through its C-terminus. Serial C-terminal truncations of FGF21 weakened or even abrogated its interaction with beta-Klotho in a Biacore assay, and led to gradual loss of potency in a luciferase reporter assay but with little effect on maximal response. In contrast, serial N-terminal truncations of FGF21 had no impact on beta-Klotho binding. Interestingly, several of them exhibited characteristics of partial agonists with minimal effects on potency. These data demonstrate that the C-terminus of FGF21 is critical for binding to beta-Klotho and the N-terminus is critical for fibroblast growth factor receptor (FGFR) activation.