Guanylyl cyclase activating protein (GCAP)-1 regulates photoreceptor membrane guanylyl cyclase, RetGC, in a Ca2+-sensitive manner. It contains four Ca2+-binding motifs, EF-hands, three of which are capable of binding Ca2+. GCAP-1 activates RetGC in low Ca2+ and inhibits it in high Ca2+. In this study we used deletion and substitution analysis to identify regions of GCAP-1 sequence that are specifically required for inhibition and activation. A COOH-terminal sequence within Met157 to Arg182 is required for activation but not for inhibition of RetGC. We localized one essential stretch to 5 residues from Arg178 to Arg182. Another sequence essential for activation is within the N-terminal residues Trp21 to Thr27. The region between EF-hands 1 and 3 of GCAP-1 also contains elements needed for activation of RetGC. Finally, we found that inhibition of RetGC requires the first 9 amino-terminal residues of GCAP-1, but none of the residues from Gln33 to the COOH-terminal Gly205 are specifically required for inhibition. The ability of GCAP-1 mutants to regulate RetGC was tested on total guanylyl cyclase activity present in rod outer segments. In addition, the key mutants were also shown to produce similar effects on recombinant bovine outer segment cyclases GC1 and GC2.