Rab proteins are a family of Ras-like small molecular weight GTPases that are localized to distinct subcellular compartments (1, 2) and believed to regulate specific steps of intracellular membrane trafficking (3-6). The functional cycle of Rab proteins involves the delivery of the GDP-bound forms to the target membrane by a GDP dissociation inhibitor (GDI) 1 (7-9), the exchange of GDP for GTP at membrane surface catalyzed by a guanine nucleotide exchange factor (GEF) (8, 9) and the retrieval of the GDP-bound forms from the membrane by GDI after GTP hydrolysis and membrane fusion (7). Localized on plasma membrane, clathrin-coated vesicles, and early endosomes (2), Rab5 has been shown to play an important role in early events of endocytosis (4, 5), although the exact mechanism of its function remains to be determined.It is known that Mg 2ϩ is essential for GTPase function and structure. Crystallographic studies of several GTP-binding proteins reveal a single Mg 2ϩ in the guanine nucleotide binding pocket, coordinating between the protein and guanine nucleotide in both GDP-and GTP analog-bound conformations (10 -15). Effects of Mg 2ϩ on guanine nucleotide binding, GTPase activity, and the structural integrity of GTP-binding proteins have been widely documented (16 -32). A key observation is that Mg 2ϩ inhibits GDP release from Ras-like GTP-binding proteins and therefore prevents binding of . However, the exact mechanism for this inhibitory effect and its physiological significance remains unknown.Important functional roles of the N-terminal domains of several Ras-like GTP-binding proteins also have been noted in studies of guanine nucleotide exchange (33-38). Myristoylation at the N terminus of ARF enhances its rate of GDP release (27), and N-terminal truncation of ARF results in loss of function by reducing its affinity for GDP and permitting GDP/GTP exchange in the absence of phospholipids (33). Moreover, deletion of the N terminus enables isolation of ARF in a nucleotide-free form (38). Finally, deletion of the N-terminal domain of Rab5 results in a loss of function (34 -37) and interferes with the protein's post-translational processing (37). These observations suggest that N-terminal domains of Ras-like GTP-binding proteins may participate in the regulation of guanine nucleotide exchange and represent crucial structural domains necessary for the function of the proteins.We have investigated mechanisms through which Mg 2ϩ and the N-terminal domain of Rab5 participate in its regulation of GDP release. . While the structure and function of Rab5 , a C-terminal truncation mutant, is influenced by Mg 2ϩ in the same fashion as Rab5WT , an N-and C-terminal truncation mutant, Rab5 , is resistant to the cation's effects. Thus, inhibition of GDP release by Mg 2ϩ appears to be exerted via chemical constraints due to the cation's coordination between GDP and Rab5, as well as conformational restraints involving the protein's N-terminal domain that are induced by Mg 2ϩ coordination with Ser 34 of Rab5. Based on the correl...