TLQP-21, a VGF-encoded peptide is emerging as a novel target for obesity-associated disorders. TLQP-21 is found in the sympathetic nerve terminals in the adipose tissue and targets the G-protein-coupled receptor complement-3a receptor1 (C3aR1). The mechanisms of TLQP-21-induced receptor activation remain unexplored. Here, we report that TLQP-21 is intrinsically disordered and undergoes a disorder-to-order transition, adopting an α-helical conformation upon targeting cells expressing the C3aR1. We determined that the hot spots for TLQP-21 are located at the C terminus, with mutations in the last four amino acids progressively reducing the bioactivity and, a single site mutation (R21A) or C-terminal amidation abolishing its function completely. Additionally, the human TLQP-21 sequence carrying a S20A substitution activates the human C3aR1 receptor with lower potency compared to the rodent sequence. These studies reveal the mechanism of action of TLQP-21 and provide molecular templates for designing agonists and antagonists to modulate C3aR1 functions.