Two isoforms of the rat prostaglandin E2 receptor, rEP3α‐R and rEP3β‐R, differ only in their C‐terminal domain. To analyze the function of the rEP3‐R C‐terminal domain in agonist induced desensitization, a cluster of Ser/Thr residues in the C‐terminal domain of the rEP3α‐R was mutated to Ala and both isoforms and the receptor mutant (rEP3α‐ST341‐349A‐R) were stably expressed in HEK293 cells. All rEP3‐R receptors showed a similar ligand‐binding profile. They were functionally coupled to Gi and reduced forskolin‐induced cAMP‐formation. Repeated exposure of cells expressing the rEP3α‐R isoform to PGE2 reduced the agonist induced inhibition of forskolin‐stimulated cAMP‐formation by 50% and led to internalization of the receptor to intracellular endocytotic vesicles. By contrast, Gi‐response as well as plasma membrane localization of the rEP3β‐R and the rEP3α‐ST341‐349A‐R were not affected by prior agonist‐stimulation. Agonist‐stimulation of HEK293‐rEP3α‐R cells induced a time‐ and dose‐dependent phosphorylation of the receptor most likely by G protein‐coupled receptor kinases and not by protein kinase A or protein kinase C. By contrast, upon agonist‐stimulation the rEP3β‐R was not phosphorylated and the rEP3α‐ST341‐349A‐R was phosphorylated only weakly. These results led to the hypothesis that agonist‐induced desensitization of the rEP3α‐R isoform is mediated most likely by a GRK‐dependent phosphorylation of Ser/Thr residues 341–349. Phosphorylation then initiates uncoupling of the receptor from Gi protein and receptor internalization. British Journal of Pharmacology (2005) 145, 1132–1142. doi:10.1038/sj.bjp.0706282