Vanilloid receptor 1 (VR1), a ligand-gated ion channel activated by vanilloids, acid, and heat, is a molecular detector that integrates multiple modes of pain. Although the function and the biophysical properties of the channel are now known, the regions of VR1 that recognize ligands are largely unknown. By the stepwise deletion of VR1 and by chimera construction using its capsaicin-insensitive homologue, VRL1, we localized key amino acids, Arg-114 and Glu-761, in the N- and C-cytosolic tails, respectively, that determine ligand binding. Point mutations of the two key residues resulted in a loss of sensitivity to capsaicin and a concomitant loss of specific binding to [(3)H]resiniferatoxin, a potent vanilloid. Furthermore, changes in the charges of the two amino acids blocked capsaicin-sensitive currents and ligand binding without affecting current responses to heat. Thus, these two regions in the cytoplasmic tails of VR1 provide structural elements for its hydrophilic interaction with vanilloids and might constitute a long-suspected binding pocket.