Recent application of the technique of fluorescence photobleaching recovery to direct measurement of the lateral mobility of plasma membrane-localized hormone receptors has shed new light on the role of receptor lateral mobility in signal transduction. Receptor for insulin and EGF have been known for some time to be largely immobile at physiological temperatures. This presumably relates to their signal transduction mechanism, which appears to require intermolecular autophosphorylation (receptor aggregation) for activation. In contrast, G-protein coupled receptors must interact with other membrane components to bring about signal transduction and it is interesting in this regard that the adenylate cyclase (AC) activating vasopressiin V2-receptor is highly laterally mobile at 37°C. It has recently been possible to reversibly modulate the V2-receptor mobile fraction (F) to largely varuing extents and to demonstrate thereby a direct effect on the maximal rate of in vivo cAMP production at 37°C in response to vasopressin. A direct correlation between f and maximal cAMP production indicates that f may be a key parameter in hormone signal transduction in vivo, especially at sub-KD (physiological) hormone concentrations, with mobile receptors being required to effect G-protein activation.