We have been studying the mechanism by which light and nucleoside triphosphates activate the discmembrane phosphodiesterase (oligonucleate 5'-nucleotidohydrolase; EC 3.1.4.1) in frog rod outer segments. GTP is orders of magnitude more effective than ATP as a cofactor in the light-dependent activation step. GTP and the analogue guanylyl-imidodiphosphate function equally as allosteric activators of photoreceptor phosphodiesterase rather than participating in the formation of a phosphorylated activator. Moreover, we have found a light-activated (5-fold) GTPase which participates in the modulation of photoreceptor phosphodiesterase. This GTPase activity appears necessary for the reversal of phosphodiesterase activation in vitro and may play a critical role in the in vivo regulation of light-sensitive phosphodiesterase. The K(m) for GTP in the light-activated GTPase reaction is <1 muM. The light sensitivity of this GTPase (number of photons required for half-maximal activation) is identical to that of light-activated phosphodiesterase. The GTPase action spectrum corresponds to the absorption spectrum of rhodopsin. There is, in addition, a light-insensitive GTPase activity with a K(m) for GTP of 90 muM. At GTP concentrations above 5 muM, there is no appreciable activation of GTPase activity by light. The substrate K(m) values for guanylate cyclase, light-activated GTPase, and light-activated phosphodiesterase order an enzyme array that might permit light to simultaneously cause the hydrolysis of both the substrate and product of guanylate cyclase. These findings reveal yet another facet of light regulation of photoreceptor/cyclic GMP levels and also provide a striking analogy to the GTP regulation of nonphotoreceptor, hormone-sensitive adenylate cyclase.