Translation initiation factor 2 (eIF2) is a heterotrimeric protein that transfers methionyl-initiator tRNA(Met) to the small ribosomal subunit in a ternary complex with GTP. The eIF2 phosphorylated on serine 51 of its alpha subunit [eIF2(alphaP)] acts as competitive inhibitor of its guanine nucleotide exchange factor, eIF2B, impairing formation of the ternary complex and thereby inhibiting translation initiation. eIF2B is comprised of catalytic and regulatory subcomplexes harboring independent eIF2 binding sites; however, it was unknown whether the alpha subunit of eIF2 directly contacts any eIF2B subunits or whether this interaction is modulated by phosphorylation. We found that recombinant eIF2alpha (glutathione S-transferase [GST]-SUI2) bound to the eIF2B regulatory subcomplex in vitro, in a manner stimulated by Ser-51 phosphorylation. Genetic data suggest that this direct interaction also occurred in vivo, allowing overexpressed SUI2 to compete with eIF2(alphaP) holoprotein for binding to the eIF2B regulatory subcomplex. Mutations in SUI2 and in the eIF2B regulatory subunit GCD7 that eliminated inhibition of eIF2B by eIF2(alphaP) also impaired binding of phosphorylated GST-SUI2 to the eIF2B regulatory subunits. These findings provide strong evidence that tight binding of phosphorylated SUI2 to the eIF2B regulatory subcomplex is crucial for the inhibition of eIF2B and attendant downregulation of protein synthesis exerted by eIF2(alphaP). We propose that this regulatory interaction prevents association of the eIF2B catalytic subcomplex with the beta and gamma subunits of eIF2 in the manner required for GDP-GTP exchange.