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Somatostatin receptor 2 (SSTR2) is a G-protein coupled receptor (GPCR) that controls numerous cellular processes including cell-to-cell signaling. In this study, we report how the lipid and ligand molecules influence the conformational dynamics of the membrane-bound SSTR2. Molecular simulations of different holo and apoenzyme complexes of SSTR2 in the presence and absence of a lipid bilayer were performed, observed, and correlated with previously reported studies. We identified the important SSTR2 residues that take part in the formation of the SSTR2-ligand complex. On analyzing the molecular simulation trajectories, we identified that the residue D3.32 is crucial in determining the bioactive conformation of SSTR2 ligands in the binding site. Based on the results, we suggest that designing a novel SSTR2 ligand with an H-bond donor group at the R1 position, and hydrophobic groups at R2 and R3 might have higher activity and SSTR2-selectivity. We analyzed the simulated systems to identify other important structural features involved in SSTR2-ligand binding and to observe the different conformational changes that occur in the protein after the ligand binding. Additionally, we studied the conformational dynamics of N- and C-terminal regions of SSTR2 in the presence and absence of the lipid bilayer. Both the systems were compared to understand the influence of lipid molecules in the formation of secondary structural domains by these extracellular regions. The comparative study revealed that the secondary structural elements formed by C-terminal residues in presence of lipid molecules is crucial for the functioning of SSTR2. Our study results highlight the structural complexities involved in the functioning of SSTR upon binding with the ligands in the presence and absence of lipid bilayer, which is essential for designing novel drug targets.

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