Visual arrestin plays an important role in regulating light responsiveness via its ability to specifically bind to the phosphorylated and light-activated form of rhodopsin. Previously, we utilized an in vitro translation system to express and characterize the full-length (404 amino acids) and two truncated forms of visual arrestin. Here we have extended these studies to include a total of 33 different truncation and deletion mutants of arrestin, ranging from 69 to 391 amino acids in length. Mutants were produced by cutting within the open reading frame of the bovine arrestin cDNA with selective restriction enzymes followed by in vitro translation of the transcribed truncated mRNAs. Mutant arrestin binding to dark, light-activated, dark phosphorylated, and light-activated phosphorylated rhodopsin as well as to opsin, phosphoopsin, and truncated rhodopsin was then extensively characterized. In addition, the sensitivity of arrestin/rhodopsin interactions to conditions of increasing ionic strength was measured. These studies suggest the localization of multiple functional domains within the arrestin molecule that include: 1) a "phosphorylation recognition" domain, which interacts with the phosphorylated carboxyl terminus of rhodopsin, was localized predominately between residues 158-185; 2) an "activation recognition" domain, which interacts with those portions of the rhodopsin molecule that change conformation upon light activation, was found to consist of at least three regions within the first 191 residues of the arrestin molecule; 3) a hydrophobic interaction domain, localized between residues 191 and 365, appears to be mobilized upon binding of arrestin to activated phosphorylated rhodopsin; 4) a regulatory domain, localized in the COOH-terminal region of arrestin (residues 365-391), was found to play a role in controlling the conformational change in arrestin necessary for mobilization of the hydrophobic interaction domain; and 5) The NH2 terminus of arrestin (residues 2-16) was found to be important for interacting with the regulatory COOH-terminal region as well as maintaining the conformation of the NH2-terminal half of arrestin. A mechanism which ensures strict arrestin binding selectivity toward phosphorylated light-activated rhodopsin is proposed.