Arrestin blocks the interaction of rhodopsin with the G protein transducin (G(t)). To characterize the sites of arrestin that interact with rhodopsin, we have utilized a spectrophotometric peptide competition assay. It is based on the stabilization of the active intermediates metarhodopsin II (MII) and phosphorylated MII by G(t) and arrestin, respectively (extra MII monitor). The protocol involves native disc membranes and three sets of peptides 10-30 amino acids in length spanning the arrestin sequence. In the absence of arrestin, not one of the peptides by itself had an effect on the amount of MII formed. However, inhibition of arrestin-dependent extra MII was found for the peptides at residues 11-30 and 51-70 (IC(50) < 100 microm) and residues 231-260 (IC(50) < 200 microm). A similar pattern of inhibition by arrestin peptides was seen when arrestin was replaced by G(t) or the farnesylated G(t)gamma C-terminal peptide. Only arrestin-(11-30) inhibited MII.G(t) less (IC(50) = 300 microm) than phosphorylated MII.arrestin. We interpreted the data by competition of the arrestin peptides for interaction sites at rhodopsin, exposed in the MII conformation and specific for both arrestin and G(t). The arrestin sites are located in both the C- and N-terminal domains of the arrestin structure.