The cGMP phosphodiesterase (PDE) of retinal rod outer segments (ROS) is activated by the GTP-bound form of the G protein, transducin (Gt alpha). This activation can be reversed by the inhibitory gamma subunit of PDE through two distinct mechanisms: acceleration of GTP hydrolysis and direct inactivation independent of GTP hydrolysis. We have found that acceleration of Gt alpha GTPase by PDE gamma does not occur upon formation of a Gt alpha PDE gamma complex but rather reflects enhanced activity toward this complex of a membrane-bound GTPase accelerating protein. GTPase rate constants for Gt alpha in the presence of 3.3 microM PDE gamma were as high as 0.7 s-1 with hypotonically washed ROS membranes at 40 microM rhodopsin but were more than 10-fold lower when protein-free vesicles containing ROS lipids were substituted for ROS membranes. Acceleration of Gt alpha GTPase by PDE gamma was also barely detectable at low ROS concentrations (e.g. 4 microM rhodopsin) or if ROS treated with trypsin or urea were used. GTPase-independent inactivation by PDE gamma occurred efficiently at much lower membrane concentrations. Inhibition of Gt alpha-activated PDE was much slower than inhibition of PDE alpha beta by PDE gamma. Effects of PDE gamma upon successive additions of GTP suggested formation of a complex of PDE gamma and Gt alpha-GDP that is refractory to reactivation.