The RhoGDI proteins serve as key multifunctional regulators of Rho family GTP-binding proteins. The 2.6 Å X-ray crystallographic structure of the Cdc42/RhoGDI complex reveals two important sites of interaction between GDI and Cdc42. First, the amino-terminal regulatory arm of the GDI binds to the switch I and II domains of Cdc42 leading to the inhibition of both GDP dissociation and GTP hydrolysis. Second, the geranylgeranyl moiety of Cdc42 inserts into a hydrophobic pocket within the immunoglobulin-like domain of the GDI molecule leading to membrane release. The structural data demonstrate how GDIs serve as negative regulators of small GTP-binding proteins and how the isoprenoid moeity is utilized in this critical regulatory interaction.