The human GABAB receptor—a member of the class C family of G-protein-coupled receptors (GPCRs)—mediates inhibitory neurotransmission and has been implicated in epilepsy, pain and addiction1. A unique GPCR that is known to require heterodimerization for function2–6, the GABAB receptor has two subunits, GABAB1 and GABAB2, that are structurally homologous but perform distinct and complementary functions. GABAB1 recognizes orthosteric ligands7,8, while GABAB2 couples with G proteins9–14. Each subunit is characterized by an extracellular Venus flytrap (VFT) module, a descending peptide linker, a seven-helix transmembrane domain and a cytoplasmic tail15. Although the VFT heterodimer structure has been resolved16, the structure of the full-length receptor and its transmembrane signalling mechanism remain unknown. Here we present a near full-length structure of the GABAB receptor, captured in an inactive state by cryo-electron microscopy. Our structure reveals several ligands that preassociate with the receptor, including two large endogenous phospholipids that are embedded within the transmembrane domains to maintain receptor integrity and modulate receptor function. We also identify a previously unknown heterodimer interface between transmembrane helices 3 and 5 of both subunits, which serves as a signature of the inactive conformation. A unique ‘intersubunit latch’ within this transmembrane interface maintains the inactive state, and its disruption leads to constitutive receptor activity.