Olivopontocerebellar atrophy with retinal degeneration is a hereditary neurodegenerative disorder that belongs to the subtype II of the autosomal dominant cerebellar ataxias and is characterized by early-onset cerebellar and macular degeneration preceded by diagnostically useful tritan colorblindness. The gene mutated in the disease (SCA7) has been mapped to chromosome 3p12-13.5, and positional cloning identified the cause of the disease as CAG repeat expansion in this gene. The SCA7 gene product, ataxin-7, is an 897 amino acid protein with an expandable polyglutamine tract close to its N-terminus. No clues to ataxin-7 function have been obtained from sequence database searches. Here we report that ataxin-7 has a motif of ca. 50 amino acids, related to the phosphate-binding site of arrestins. To test the relevance of this sequence similarity, we introduced the putative ataxin-7 phosphate-binding site into visual arrestin and beta-arrestin. Both chimeric arrestins retain receptor-binding affinity and show characteristic high selectivity for phosphorylated activated forms of rhodopsin and beta-adrenergic receptor, respectively. Although the insertion of a Gly residue (absent in arrestins but present in the putative phosphate-binding site of ataxin-7) disrupts the function of visual arrestin-ataxin-7 chimera, it enhances the function of beta-arrestin-ataxin-7 chimera. Taken together, our data suggest that the arrestin-like site in the ataxin-7 sequence is a functional phosphate-binding site. The presence of the phosphate-binding site in ataxin-7 suggests that this protein may be involved in phosphorylation-dependent binding to its protein partner(s) in the cell.