beta-Arrestin1 and beta-arrestin2 play a key role in the regulation of G protein-coupled receptor-mediated signaling, whereas the subcellular distribution of beta-arrestin1 and beta-arrestin2 has been shown to be quite different. In this study, we found that although both beta-arrestin1 and beta-arrestin2 are able to interact with ubiquitin-protein isopeptide ligase (E3) Mdm2, only expression of beta-arrestin2 leads to the relocalization of Mdm2 from the nucleus to the cytoplasm. Further study reveals that beta-arrestin2 but not beta-arrestin1 shuttles between the cytoplasm and nucleus in a leptomycin B-sensitive manner. A hydrophobic amino acid-rich region (VXXXFXXLXL) at the C terminus of beta-arrestin2 was further demonstrated to serve as a nuclear export signal responsible for the extranuclear localization of beta-arrestin2. In the corresponding region of beta-arrestin1, there is a single amino acid difference (Glu instead of Leu in beta-arrestin2), and mutation of Glu to Leu conferred to beta-arrestin1 similar subcellular distribution to that of beta-arrestin2. Moreover, data from a series of deletion mutations demonstrated that the N domain (residues 1-185) was indispensable for the nuclear localization of both beta-arrestins, and the results from a Val to Asp point mutation in the N domain also supported this notion. In addition, our data showed that nucleocytoplasmic shuttling of beta-arrestin2 was required, via protein/protein interaction, for the cytoplasmic relocalization of Mdm2 and JNK3, another well known beta-arrestin2-binding protein. Our study thus suggests that both the nuclear export signal motif and the N domain of beta-arrestins are critical for the regulation of their subcellular localization and that beta-arrestin2 may modulate the function of its binding partners such as Mdm2 and JNK3 by alteration of their subcellular distribution.