The melanocortin receptors (MCRs) are important for numerous biological pathways, including feeding behavior and energy homeostasis. In addition to endogenous peptide agonists, this receptor family has two naturally occurring endogenous antagonists, agouti and agouti-related protein (AGRP). At the melanocortin-4 receptor (MC4R), the AGRP ligand functions as an endogenous inverse agonist in the absence of agonist and as a competitive antagonist in the presence of agonist. At the melanocortin-3 receptor (MC3R), AGRP functions solely as a competitive antagonist in the presence of agonist. The molecular interactions that differentiate AGRP's inverse agonist activity at the MC4R have remained elusive until the findings reported herein. Upon the basis of homology molecular modeling approaches, we previously postulated a unique interaction between the D189 position of the hMC4R and Asn114 of AGRP. To further test this hypothesis, six D189 mutant hMC4Rs (D189A, D189E, D189N, D189Q, D189S, and D189K) were generated and pharmacologically characterized resulting in the discovery of differences in inverse agonist activity of AGRP and an 11 macrocyclic compound library. These data support the hypothesized interaction between the hMC4R D189 position and Asn114 residue of AGRP and define critical ligand-receptor molecular interactions responsible for the inverse agonist activity of AGRP at the hMC4R.