In the current study, we have established that the human (h) prostacyclin receptor (IP) is isoprenylated in whole cells. Through site directed mutagenesis and generation of the isoprenylation defective hIPSSLC, it was established that while isoprenylation of hIP does not influence ligand binding, it is obligatory for agonist activation of adenylyl cyclase and cAMP generation. Overexpression of GαS significantly augmented cAMP generation by the hIP but not by the hIPSSLC. Moreover, GαS co-immunoprecipitated with hIP following agonist activation but did not co-immunoprecipitate with hIPSSLC. Whereas hIP mediated concentration-dependent activation of phospholipase C (PLC); the extent of PLC activation by hIPSSLC was impaired compared to hIP. Co-expression of Gαq significantly augmentated intracellular calcium mobilization by the hIP but not by hIPSSLC. Moreover, whereas Gαq co-immunoprecipitated with hIP, it failed to co-immunoprecipitate with hIPSSLC. While both the hIP and hIPSSLC underwent agonist-induced internalization, the kinetics and extent of hIPSSLC internalization was impaired compared to hIP. Altering the CAAX motif of the hIP from a farnesyl (–CSLC) to a geranylgeranyl (–CSLL) isoprene acceptor, to generate hIPCSLL, did not affect ligand binding and yielded a receptor that exhibited identical signalling through both Gs- and Gq-coupled effectors to that of hIP. Thus, whereas isoprenylation of hIP does not influence ligand binding, it is functionally imperative in regulating post-receptor events including agonist-activation of adenylyl cyclase, for efficient activation of PLC and for receptor internalization. Though the nature of the isoprenoid attached to hIP does not act as a major determinant, the presence of an isoprenoid group, for example farnesyl or geranylgeranyl, is required for functional receptor–G protein interaction and coupling and for efficient agonist- induced receptor internalization.