The C. elegans proteins PAQR-2 (a homolog of the human seven-transmembrane domain AdipoR1 and AdipoR2 proteins) and IGLR-2 (a homolog of the mammalian LRIG proteins characterized by a single transmembrane domain and the presence of immunoglobulin domains and leucine-rich repeats in their extracellular portion) form a complex that protects against plasma membrane rigidification by promoting the expression of fatty acid desaturases and the incorporation of polyunsaturated fatty acids into phospholipids, hence increasing membrane fluidity. In the present study, we leveraged a novel gain-of-function allele of PAQR-1, a PAQR-2 paralog, to carry out structure-function studies. We found that the transmembrane domains of PAQR-2 are responsible for its functional requirement for IGLR-2, that PAQR-1 does not require IGLR-2 but acts via the same pathway as PAQR-2, and that the divergent N-terminal cytoplasmic domains of the PAQR-1 and PAQR-2 proteins serve a regulatory function and may regulate access to the catalytic site of these proteins. We also show that overexpression of human AdipoR1 or AdipoR2 alone is sufficient to confer increased palmitic acid resistance in HEK293 cells, and thus act in a manner analogous to the PAQR-1 gain-of-function allele.