G protein-coupled receptors (GPCRs) represent the single largest family of cell surface receptors involved in signal transduction. It is estimated that several hundred distinct members of this receptor family in humans direct responses to a wide variety of chemical transmitters, including biogenic amines, amino acids, peptides, lipids, nucleosides, and large polypeptides. These transmembrane receptors are key controllers of such diverse physiological processes as neurotransmission, cellular metabolism, secretion, cellular differentiation, and growth as well as inflammatory and immune responses. GPCRs therefore represent major targets for the development of new drug candidates with potential application in all clinical fields. Many currently used therapeutics act by either activating (agonists) or blocking (antagonists) GPCRs. Studies over the past two decades have provided a wealth of information on the biochemical events underlying cellular signalling by GPCRs. However, our understanding of the molecular interactions between ligands and the receptor protein and, particularly, of the structural correlates of receptor activation or inhibition by agonists and inverse agonists, respectively, is still rudimentary. Most of the work in this area has focused on mapping regions of the receptor responsible for drug binding affinity. Although binding of ligand molecules to specific receptors represents the first event in the action of drugs, the efficacy with which this binding is translated into a physiological response remains the only determinant of therapeutic utility. In the last few years, increasing evidence suggested that receptor oligomerization and in particular dimerization may play an important role in the molecular events leading to GPCR activation. In this paper, we review the biochemical and functional evidence supporting this notion.