G protein coupled receptors are the integral membrane proteins that detect extracellular ligands and mediate signal transduction. Binding of ligands triggers a cascade of conformational changes, which are recognized by intracellular effectors. We developed a single-molecule fluorescence system to observe conformational dynamics of the β2-adrenergic receptor within a native-like membrane environment. The ligand-free receptor spontaneously switches between inactive and active receptor conformations, explaining the basal signaling activity. The presence of agonist or inverse agonist ligands influences the rate constants for conformational exchange and shifts the equilibrium distribution of active and inactive states. The existence of equilibria between transiently populated GPCR conformations, whose durations are governed by the nature of the bound ligand, is a key mechanistic feature of GPCR-mediated signaling.