Updated project metadata. Arrestins are a protein family that regulate G protein-coupled receptor (GPCR) signaling, with four distinct members in mammals (arrestin 1–4). Phosphorylated residues of G protein-coupled receptors bind to the N-domain of arrestin, resulting in C-terminus release. This induces further allosteric conformational changes, such as polar core disruption, alteration of interdomain loops, and domain rotation, which transform arrestins into the receptor-activated state. It is widely accepted that arrestin activation occurs by conformational changes propagated from the N- to the C-domain. However, recent studies have revealed that binding of phosphatidylinositol 4,5-bisphosphate (PIP2) to the C-domain transforms arrestins into an active state. In this study, we aimed to elucidate the mechanisms underlying PIP2-induced arrestin activation. We compared the conformational changes of β-arrestin-2 upon binding of PIP2 or phosphorylated C-tail peptide of vasopressin receptor type 2 (V2Rpp) using hydrogen/deuterium exchange mass spectrometry (HDX-MS). Introducing point mutations on the potential routes of the allosteric conformational changes and analyzing these mutant constructs with HDX-MS revealed that PIP2-binding at the C-domain affects the back loop, which destabilizes the gate loop and β-strand XX to transform β-arrestin-2 into the pre-active state.