We have used the yeast two-hybrid system to identify protein kinase C-ζ interacting protein (ZIP) as a novel interacting protein for the D2 dopamine receptor (DAR). This interaction was identified by screening a rat brain cDNA library using the third intracellular loop of the D2 DAR as bait. A partial-length cDNA encoding ZIP was isolated and characterized as specifically interacting with the third intracellular loop of the D2 DAR, but not with the third intracellular loops of other DAR subtypes. Biochemical confirmation of the ZIP–D2 DAR interaction was obtained by expressing the full-length ZIP and D2 DAR proteins in mammalian cells and demonstrating that they could be co-immunoprecipitated. We further showed that ZIP and the D2 DAR could be co-immunoprecipitated from endogenous brain tissues. Immunohistochemical analyses further revealed that ZIP and the D2 DAR were extensively co-localized within numerous neurons in various brain regions. ZIP exists as three protein isoforms of varying length, which are derived from alternative RNA splicing. All three isoforms were found to interact with the D2 DAR, which allowed for the delineation of the receptor interacting domain to within 38 residues of ZIP. Functionally, over-expression of ZIP was found to result in decreased expression of the D2 DAR with a corresponding decrease in receptor modulation of cAMP accumulation. Confocal microscopy revealed that ZIP over-expression also lead to an intracellular accumulation of D2 DAR protein in lysosome compartments. These results suggest that ZIP can physically interact with the D2 DAR leading to increased intracellular trafficking to lysosomes with subsequent down-regulation of receptor expression and function.