The interaction of rac with guanine nucleotide dissociation inhibitor protein (rhoGDI) is described, using GDI fluorescently labeled on its single cysteine with N-[2-(1-maleimidyl)ethyl]-7-diethylaminocoumarin-3-carboxamide (MDCC). The labeled GDI shows a 70% decrease in fluorescence emission on binding geranylgeranylated rac1.GDP and has an affinity for rac1 within a factor of 2 of the unlabeled GDI. The labeled GDI was used to determine the kinetic mechanism of the interaction by measuring the association and dissociation in real time. The kinetics are interpreted in terms of a two-step mechanism: binding of rac to GDI and then a conformational change of the complex with an overall dissociation constant of 0.4 nM. The conformational change has a rate constant of 7.3 s-1 (pH 7.5, 30 degrees C), and the reverse has a rate constant of 1.4 x 10(-)3 s-1. To overcome difficulties inherent in using and manipulating lipid-modified rac, we also used a combination of unmodified rac1, expressed in Escherichia coli and produced with C-terminal truncation (thus lacking the cysteine that is the site of lipid attachment), and farnesylated C-terminal peptide. This combination can mimic geranylgeranylated rac1, producing a complex with the coumarin-labeled GDI, and was used to examine the relative importance of different regions of rac1 in interaction with GDI.