Guanylyl cyclase activating protein 1 (GCAP-1), a Ca(2+)/Mg(2+) sensor protein that accelerates retinal guanylyl cyclase (RetGC) in the light and decelerates it in the dark, is inactive in cation-free form. Binding of Mg(2+) in EF-hands 2 and 3 was essential for RetGC activation in the conditions mimicking light adaptation. Mg(2+) binding in EF-hand 2 affected the conformation of a neighboring non-metal binding domain, EF-hand-1, and increased GCAP-1 affinity for RetGC nearly 40-fold compared with the metal-free EF-hand 2. Mg(2+) binding in EF-hand 3 increased GCAP-1 affinity for RetGC 5-fold and its maximal RetGC stimulation 2-fold. Mg(2+) binding in EF-hand 4 affected neither GCAP-1 affinity for RetGC, nor RetGC activation. Inactivation of Ca(2+) binding in EF-hand 4 was sufficient to render GCAP-1 a constitutive activator of RetGC, whereas the EF-hand 3 role in Ca(2+)-dependent deceleration of RetGC was likely to be through the neighboring EF-hand 4. Inactivation of Ca(2+) binding in EF-hand 2 affected cooperativity of RetGC inhibition by Ca(2+), but did not prevent the inhibition. We conclude that 1) Mg(2+) binding in EF-hands 2 and 3, but not EF-hand 4, is essential for the ability of GCAP-1 to activate RetGC in the light; 2) Mg(2+) or Ca(2+) binding in EF-hand 3 and especially in EF-hand 2 is required for high-affinity interaction with the cyclase and affects the conformation of the neighboring EF-hand 1, a domain required for targeting RetGC; and 3) RetGC inhibition is likely to be primarily caused by Ca(2+) binding in EF-hand 4.