alpha-Factor, a 13-amino-acid pheromone secreted by haploid alpha cells of Saccharomyces cerevisiae, binds to Ste2p, a seven-transmembrane, G-protein-coupled receptor present on haploid alpha cells, to activate a signal transduction pathway required for conjugation and mating. To determine the structural requirements for alpha-factor activity, we developed a genetic screen to identify from random and semirandom libraries novel peptides that function as agonists or antagonists of Ste2p. The selection scheme was based on autocrine strains constructed to secrete random peptides and respond by growth to those that were either agonists or antagonists of Ste2p. Analysis of a number of peptides obtained by this selection procedure indicates that Trp1, Trp3, Pro8, and Gly9 are important for agonist activity specifically. His2, Leu4, Leu6, Pro10, a hydrophobic residue 12, and an aromatic residue 13 are important for both agonist and antagonist activity. Our results also show that activation of Ste2p can be achieved with novel, unanticipated combinations of amino acids. Finally, the results suggest the utility of this selection scheme for identifying novel ligands for mammalian G-protein-coupled receptors heterologously expressed in S. cerevisiae.