The human 5-HT7 serotonin receptor, a G-protein-coupled receptor (GPCR), activates adenylyl cyclase constitutively and upon agonist activation. Biased ligands differentially activate 5-HT7 serotonin receptor desensitization, internalization and degradation in addition to G protein activation. We have previously found that the atypical antipsychotics clozapine and olanzapine inhibited G protein activation and, surprisingly, induced both internalization and lysosomal degradation of 5-HT7 receptors. Here, we aimed to determine the mechanism of clozapine- and olanzapine-mediated degradation of 5-HT7 receptors. In the C-terminus of the 5-HT7 receptor, we identified two YXXΦ motifs, LR residues, and a palmitoylated cysteine anchor as potential sites involved in receptor trafficking to lysosomes followed by receptor degradation. Mutating either of these sites inhibited clozapine- and olanzapine-mediated degradation of 5-HT7 receptors and also interfered with G protein activation. In addition, we tested whether receptor degradation was mediated by the GPCR-associated sorting protein-1 (GASP-1). We show that GASP-1 binds the 5-HT7 receptor and regulates the clozapine-mediated degradation. Mutations of the identified motifs and residues, located in or close to Helix-VIII of the 5-HT7 receptor, modified antipsychotic-stimulated binding of proteins (such as GASP-1), possibly by altering the flexibility of Helix-VIII, and also interfered with G protein activation. Taken together, our data demonstrate that binding of clozapine or olanzapine to the 5-HT7 receptor leads to antagonist-mediated lysosomal degradation by exposing key residues in the C-terminal tail that interact with GASP-1.