Neurodegeneration in Alzheimer;s disease (AD) correlates with dysfunction of signaling mediated by Gaq/11. Non-dissociable angiotensin II AT2 receptor oligomers are linked to the impaired Gaq/11-stimulated signaling of AD patients and transgenic mice with AD-like symptoms. To further analyze the role of AT2 receptor oligomers, we induced the formation AT2 oligomers in an in vitro cell system. Similarly as in vivo, sequential oxidative and transglutaminase-dependent cross-linking steps triggered the formation of AT2 oligomers in vitro. Elevated reactive oxygen species mediated oxidative cross-linking of AT2 monomers to dimers involving tyrosine residues located at putative inter-receptor contact sites of the cytoplasmic loop connecting transmembrane helices III/IV. Cross-linked AT2 dimers were subsequently a substrate of activated transglutaminase-2, which targeted the carboxyl terminus of AT2 dimers as assessed by truncated and chimeric AT2 receptors, respectively. AT2 oligomers acted as dominant-negative receptors in vitro by mediating Gaq/11 protein sequestration and Gaq/11 protein arrest. The formation of AT2 oligomers and G-protein dysfunction could be suppressed in vitro and in vivo by an AT2 receptor mutant. Inhibition of AT2 oligomerization upon stereotactic expression of the AT2 receptor mutant revealed that Gaq/11-sequestering AT2 oligomers enhanced the development of neurodegenerative symptoms in the hippocampus of transgenic mice with AD-like pathology. Thus, AT2 oligomers inducing Gaq/11 arrest are causally involved in inducing symptoms of neurodegeneration.