Dimerization of the erythropoietin (EPO) receptor (EPOR), in the presence of either natural (EPO) or synthetic (EPO-mimetic peptides, EMPs) ligands is the principal extracellular event that leads to receptor activation. The crystal structure of the extracellular domain of EPOR bound to an inactive (antagonist) peptide at 2.7 A resolution has unexpectedly revealed that dimerization still occurs, but the orientation between receptor molecules is altered relative to active (agonist) peptide complexes. Comparison of the biological properties of agonist and antagonist EMPs with EPO suggests that the extracellular domain orientation is tightly coupled to the cytoplasmic signaling events and, hence, provides valuable new insights into the design of synthetic ligands for EPOR and other cytokine receptors.