Bovine serum albumin inhibits the light activation of bovine rod disc membrane (RDM) cyclic GMP phosphodiesterase. The KI for inhibition is 32 microM at pH 8 and 37 degrees C. Trypsin-activated phosphodiesterase was not inhibited under these conditions, suggesting that albumin does not alter substrate access to the enzyme. Light titration curves of phosphodiesterase activity were vertically displaced downwards by albumin. The lack of displacement along the bleach axis indicated no loss in relative light sensitivity, but rather loss of a constant fraction of the normal activity for each bleach level. Thus, activated rhodopsin appeared to be functional in the presence of albumin. However, the metarhodopsin II yield with less than 10% bleached was reduced in the presence of albumin. This effect was quantitatively explained by albumin elution of GTP-binding protein from the RDM. Similarly, the reduction in light-induced phosphodiesterase activity quantitatively matched GTP-binding protein elution by albumin. beta-Lactoglobulin, which, like albumin, is known to bind hydrophobic molecules, also inhibits phosphodiesterase activation. In contrast, ovalbumin, which has little hydrophobic binding affinity, had little or no inhibitory effect on phosphodiesterase light activation. We conclude that albumin and other molecules capable of hydrophobic interactions inhibit light activation of RDM-phosphodiesterase by selectively eluting GTP-binding protein from the membrane into the surrounding medium where it is unable to efficiently gain access to activated rhodopsin.