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Rab/Ypt guanosine triphosphatases (GTPases) represent a family of key membrane traffic regulators in eukaryotic cells whose function is governed by the guanosine diphosphate (GDP) dissociation inhibitor (RabGDI). Using a combination of chemical synthesis and protein engineering, we generated and crystallized the monoprenylated Ypt1:RabGDI complex. The structure of the complex was solved to 1.5 angstrom resolution and provides a structural basis for the ability of RabGDI to inhibit the release of nucleotide by Rab proteins. Isoprenoid binding requires a conformational change that opens a cavity in the hydrophobic core of its domain II. Analysis of the structure provides a molecular basis for understanding a RabGDI mutant that causes mental retardation in humans.