Mono-ADP-ribosylation is a post-translational modification of cellular proteins that has been implicated in the regulation of signal transduction, muscle cell differentiation, protein trafficking, and secretion. In several cell systems we have observed that the major substrate of endogenous mono-ADP-ribosylation is a 36-kDa protein. This ADP-ribosylated protein was both recognized in Western blotting experiments and selectively immunoprecipitated by a G protein beta subunit-specific polyclonal antibody, indicating that this protein is the G protein beta subunit. The ADP-ribosylation of the beta subunit was due to a plasma membrane-associated enzyme, was sensitive to treatment with hydroxylamine, and was inhibited by meta-iodobenzylguanidine, indicating that the involved enzyme is an arginine-specific mono-ADP-ribosyltransferase. By mutational analysis, the target arginine was located in position 129. The ADP-ribosylated beta subunit was also deribosylated by a cytosolic hydrolase. This ADP-ribosylation/deribosylation cycle might be an in vivo modulator of the interaction of betagamma with specific effectors. Indeed, we found that the ADP-ribosylated betagamma subunit is unable to inhibit calmodulin-stimulated type 1 adenylyl cyclase in cell membranes and that the endogenous ADP-ribosylation of the beta subunit occurs in intact Chinese hamster ovary cells, where the NAD(+) pool was labeled with [(3)H]adenine. These results show that the ADP-ribosylation of the betagamma subunit could represent a novel cellular mechanism in the regulation of G protein-mediated signal transduction.