Geranylgeranylation of Rab GTPases is an essential post-translational modification that enables Rabs to associate with intracellular membranes where they regulate exocytic and endocytic pathways. Geranylgeranylation is initiated by formation of a stable complex between newly synthesized Rab proteins and Rab escort protein (REP). The complex is recognized by Rab geranylgeranyl (GG) transferase, which transfers two GG groups to Rabs. The geranylgeranylated Rabs regulate vesicular movement by oscillating between an inactive GDP-bound form and an active GTP-bound form. In this study, I show that the kinetics of geranylgeranylation is influenced by the nucleotide status of nascent Rab. GDP-bound Rab is geranylgeranylated with 10-50-fold higher affinity than GTP-bound Rab (or GTP analog-bound Rab), as indicated by the apparent Km of the reaction. In vitro REP.Rab binding assays demonstrate that REP forms a stable complex only with the GDP-bound form of Rab but not the GTP-bound form, suggesting that the apparent Km effect in the prenylation reaction is due to a discrimination between the two different nucleotide-bound forms of Rab by REP. Inasmuch as Rabs are likely GTP-bound after synthesis and REP does not possess GTPase-activating protein activity, these results raise the possibility that a Rab GTPase-activating protein enhances the REP*Rab interaction prior to prenylation.