To identify structural determinants of ligand binding in the glucagon receptor, eight receptor chimeras and additional receptor point mutants were prepared and studied. Amino acid residues 103-117 and 126-137 in the extracellular N-terminal tail and residues 206-219 and 220-231 in the first extracellular loop of the glucagon receptor were replaced with the corresponding segments of the glucagon-like peptide-1 receptor or the secretin receptor. Specific segments of both the N-terminal tail and the first extracellular loop of the glucagon receptor are required for hormone binding. The 206-219 segment of the first loop appears to be important for both glucagon binding and receptor activation. Functional studies with a synthetic chimeric peptide consisting of the N-terminal 14 residues of glucagon and the C-terminal 17 residues of glucagon-like peptide 1 suggest that hormone binding specificity may involve this segment of the first loop. The binding selectivity may arise in part from aspartic acid residues in this segment. Mutation of R-202 located at the junction between the second transmembrane helix and the first loop resulted in a mutant receptor that failed to bind glucagon or signal. We conclude that high-affinity glucagon binding requires multiple contacts with residues in the N-terminal tail and first extracellular loop domain of the glucagon receptor, with hormone specificity arising primarily from the amino acid 206-219 segment. The data suggest a model whereby glucagon first interacts with the N-terminal domain of the receptor followed by more specific interactions between the N-terminal half of the peptide and the first extracellular loop of the receptor, leading to activation.