We have used alanine-scanning mutagenesis followed by functional expression and molecular modeling to analyze the roles of the 14 residues, Asn422 to Cys435, C-terminal to transmembrane (TM) helix 7 of the M(1) muscarinic acetylcholine receptor. The results suggest that they form an eighth (H8) helix, associated with the cytoplasmic surface of the cell membrane in the active state of the receptor. We suggest that the amide side chain of Asn422 may act as a cap to the C terminus of TM7, stabilizing its junction with H8, whereas the side chain of Phe429 may restrict the relative movements of H8 and the C terminus of TM7 in the inactive ground state of the receptor. We have identified four residues, Phe425, Arg426, Thr428, and Leu432, which are important for G protein binding and signaling. These may form a docking site for the C-terminal helix of the G protein α subunit, and collaborate with G protein recognition residues elsewhere in the cytoplasmic domain of the receptor to form a coherent surface for G protein binding in the activated state of the receptor.