Among glycoprotein hormone receptors the TSH receptor (TSHR) in the most susceptible to constitutive by mutations in various regions of the molecule, including mutations in the extracellular domain (ECD) and extracellular loops of the transmembrane domain (TMD) to understand the role of hte ECD in TSHR activation we have tested several TSHR constructs with major deletions of the ECD. Previous studies reported very low expression of such truncated glycoprotein hormone receptors, which prevented reliable assessment of their ligand-binding and basal constitutive activities. We have eliminated this problem using TSHR at its N-terminus with a hemagglutinin tag (HA) recognized by the HA-specific monoclonal antibody. Based on such quantitation the TSHR deletion mutant missing 386 N-terminal amino acid residues, constituting 98% of the entire ECD, showed 4-7 fold higher normalized basal activity compared to activity of the corresponding wild-type (WT) TSHR construct. This increase in basal was significantly inhibited by linking the common α-subunit of glycoprotein hormones at the N-terninus of the truncated TSH receptor. Thr role of a hypothetical activating fragment (409-418) in TSHR activatoin was further studied using peptides and mutagenesis of charged residues. This study provides important evidence supporting the “two-state” model of TSHR activation and the potential role of proteolytic cleavage for recetor activation. Accordingly, the mechanism of hormone-induced receptor activation is dependent, at least in part, on the elimination of inhibitory within the receptor. Such intra-molecular inhibition of TSHR may include electrostatic interactions between the ECD and extracellular loops of TMD. Moreover, the truncated, constitutively active receptors described herein privide new insights valuable in the design of TSHR antagonists.