Regulators of G protein signaling control the duration and extent of signaling via G protein-coupled receptor (GPCR) pathways by accelerating the GTP hydrolysis on G protein α subunits thereby promoting termination of GPCR signaling. A member of this family, RGS7, plays a critical role in the nervous system where it regulates multiple neurotransmitter GPCRs that mediate vision, memory, and the action of addictive drugs. Previous studies have established that in vivo RGS7 forms mutually exclusive complexes with the membrane protein RGS7-binding protein or the orphan receptor GPR158. In this study, we examine the impact of GPR158 on RGS7 in the brain. We report that knock-out of GPR158 in mice results in marked post-transcriptional destabilization of RGS7 and substantial loss of its association with membranes in several brain regions. We further identified the RGS7-binding site in the C terminus of GPR158 and found that it shares significant homology with the RGS7-binding protein. The proximal portion of the GPR158 C terminus additionally contained a conserved sequence that was capable of enhancing RGS7 GTPase-activating protein activity in solution by an allosteric mechanism acting in conjunction with the regulators of the G protein signaling-binding domain. The distal portion of the GPR158 C terminus contained several phosphodiesterase E γ-like motifs and selectively recruited G proteins in their activated state. The results of this study establish GPR158 as an essential regulator of RGS7 in the native nervous system with a critical role in controlling its expression, membrane localization, and catalytic activity.