G-protein-coupled receptors (GPCRs) are integral membrane proteins that regulate a number of important physiological processes. The exact mechanism and factors governing activation of GPCRs remains controversial. Here we shed light on how the conformational energetics of GPCR activation are modulated by soft matter — lipids and water. We use the visual receptor rhodopsin as an archetypal GPCR to study and explain these soft matter effects. According to the flexible surface model (FSM), we hypothesize that changes in lipid membrane properties and osmotic pressure govern conformational substates of rhodopsin. We varied the osmotic stress on rhodopsin using different concentrations and molar masses of polyethylene glycol (PEG). Shifting of the metarhodopsin equilibrium due to the lipid environment and osmotic pressure was probed using electronic spectroscopy. We explain the lipid effects in terms of coupling of the rhodopsin activation to changes monolayer curvature. Native rhodopsin membranes favor negative curvature associated with the active Meta-II state, while POPC lipids possess zero intrinsic curvature and favors inactive Meta-I. We furthermore observed an influx of about 80 water molecules into the rhodopsin core upon activation in both native and POPC membranes. This influx of water stabilizes the expanded Meta-II state [1]. The osmotic stress applied to rhodopsin prevents the influx of water into the protein interior (favoring Meta-I) and thickens the membrane bilayer (favoring Meta-II). However, the overall equilibrium is shifted to Meta-I, indicating that the protein osmotic effect is greater than the lipid osmotic effect. We further observed that the binding affinity of the C-terminal peptide to rhodopsin is significantly decreased by POPC lipids and osmotic dehydration compared to the native conditions. Our results achieve a new understanding of how soft matter controls GPCR signaling.