To study the fate of TSHR upon TSH binding, we constructed a chimeric cDNA that encodes a yellow fluorescent protein (YFP) fused to the carboxyl terminus of human TSH receptor. The protein expression in transfected cells was confirmed using flow cytometry. The functionality of the chimeric protein was determined by its ability to transduce signal leading to activation of cAMP in a TSH dose dependent manner. The levels of cAMP produced by these cells were comparable to the levels seen in cells transfected with unfused TSHR without the YFP. Using deconvolution microscopy, we observed that the receptor is largely expressed on the cell surface, but upon addition of TSH some of the receptors were rapidly internalized. This conclusion was supported by several independent observations involving different cells either expressing native or recombinant TSHR. Upon TSH treatment, we observed internalization of human TSHR-YFP and human TSHR, expressed on 293 and CHO cells respectively. This was further substantiated when we observed co-localization of rhodamine labeled TSH with TSHR-YFP within the cell and by the uptake of radiolabeled TSH. Furthermore, shortly after ligand binding, there was a profound change in the morphology of the cells and some of the receptors accumulated in the perinuclear region of the cell. The TSHR-YFP was co-localized with RhoB-CFP indicating that it accumulated within the endosomes. These results indicate that the receptor internalization might in part be responsible for TSHR desensitization upon TSH binding.