► GHS-R1b is predominantly localized in the ER. ► GHS-R1a homodimers are evenly distributed in all subcellular compartments. ► GHS-R1a/GHS-R1b heterodimers are concentrated in the ER. ► GHS-R1a constitutively activates ERK1/2 in the ER. The ghrelin receptor (GHS-R1a) is remarkable amongst G-protein-coupled receptors for its high degree of constitutive activity, and this agonist-independent activity may be important for its physiological function in the control of food intake and body weight. Ghrelin receptors form heterodimers with the truncated ghrelin receptor polypeptide (GHS-R1b), which has a dominant-negative effect on ghrelin receptor function. Here we show that GHS-R1b has an intracellular localization distinct from ghrelin receptors, being primarily localized in the endoplasmic reticulum. Immunocytochemical studies suggest that GHS-R1b decreases the plasma membrane expression of ghrelin receptors, but the overall distribution profile of ghrelin receptors in isolated subcellular fractions is unaffected by GHS-R1b. Using bioluminescence resonance energy transfer methods, we have shown that while ghrelin receptor homodimers are evenly distributed in all subcellular fractions, GHS-R1a/GHS-R1b heterodimers are concentrated within the endoplasmic reticulum and these results suggest that GHS-R1b traps ghrelin receptors within the endoplasmic reticulum by the process of oligomerization. Furthermore, ghrelin receptors constitutively activated extracellular signal-regulated kinases 1/2 in the endoplasmic reticulum, but this small response was not affected by GHS-R1b and its physiological relevance is uncertain. Taken together, these results suggest that ghrelin receptors can be retained in the endoplasmic reticulum by heterodimerization with GHS-R1b, and constitutive activation of phospholipase C is attenuated due to decreased cell surface expression of ghrelin receptors. However, sufficient ghrelin receptor homodimers can still be expressed on the cell surface for maximal responses to agonist stimulation.