The GTP-binding subunit of transducin (T alpha) activates the cGMP phosphodiesterase (PDE) of bovine retinal rods by relieving the constraint imposed by the inhibitory subunit PDE gamma. We have isolated and characterized the complex T alpha.GTP gamma S-PDE gamma formed when T alpha is activated by the nonhydrolyzable analog GTP gamma S. Sedimentation and light-scattering techniques demonstrate that, in contrast to free T alpha.GTP gamma S, which is soluble, the T alpha.GTP gamma S-PDE gamma complex, as well as T alpha.GTP-PDE gamma, is membrane bound at cytosolic ionic strength. It is eluted from the membrane at low ionic strength as a monomeric and 1:1 stoichiometric complex. The relative affinities of PDE gamma for PDE alpha beta and for T alpha.GTP are discussed.