The adenylate cyclase coupled inhibitory nucleotide regulatory protein (Ni) and the bovine retinal nucleotide regulatory protein transducin (T) appear to share some common functional properties since their GTPase activity is stimulated to similar extents by the retinal photoreceptor rhodopsin. In the present work, we sought to assess whether these functional similarities might extend to their interaction with adenylate cyclase. This necessitated the development of reconstitution systems in which guanine nucleotide regulatory protein mediated inhibition of adenylate cyclase activity could be demonstrated and characterized in a lipid milieu. In the absence of the pure human erythrocyte stimulatory nucleotide regulatory protein (Ns), the insertion into phospholipid vesicles of either pure Ni from human erythrocytes or pure bovine T with the resolved catalytic moiety of bovine caudate adenylate cyclase (C) does not establish GppNHp inhibition of either Mg2+- or forskolin-stimulated adenylate cyclase. However, the coinsertion into lipid vesicles of either Ni or T with Ns and resolved C results in an inhibition of Ns(GppNHp) stimulatable C activity. As is the case in intact membranes, the reconstituted inhibition of the Ns-stimulated C activity extends into the steady-state phase of time courses of activity. This inhibition is highly sensitive to the MgCl2 concentration. At 2 mM MgCl2, the inhibition is greater than 80% while at 50 mM MgCl2 it is only approximately 20%.(ABSTRACT TRUNCATED AT 250 WORDS)