Stimulation of the metabotropic GABAB receptor by γ-aminobutyric acid (GABA) results in prolonged inhibition of neurotransmission, which is central to brain physiology1. GABAB belongs to family C of the G-protein-coupled receptors, which operate as dimers to transform synaptic neurotransmitter signals into a cellular response through the binding and activation of heterotrimeric G proteins2,3. However, GABAB is unique in its function as an obligate heterodimer in which agonist binding and G-protein activation take place on distinct subunits4,5. Here we present cryo-electron microscopy structures of heterodimeric and homodimeric full-length GABAB receptors. Complemented by cellular signalling assays and atomistic simulations, these structures reveal that extracellular loop 2 (ECL2) of GABAB has an essential role in relaying structural transitions by ordering the linker that connects the extracellular ligand-binding domain to the transmembrane region. Furthermore, the ECL2 of each of the subunits of GABAB caps and interacts with the hydrophilic head of a phospholipid that occupies the extracellular half of the transmembrane domain, thereby providing a potentially crucial link between ligand binding and the receptor core that engages G proteins. These results provide a starting framework through which to decipher the mechanistic modes of signal transduction mediated by GABAB dimers, and have important implications for rational drug design that targets these receptors.