LGN and activator of G-protein signaling 3 (AGS3) belong to the class of G-protein modulators containing G-protein regulatory motifs (GPR proteins). Evidence for the functions of these molecules has only started to emerge. Immunostaining of mouse retina cross-sections and serial tangential sectioning of the retina combined with immunoblot analysis revealed that LGN is expressed in the inner segments of photoreceptor cells. Double immunolabeling demonstrated that, following light-dependent translocation from the outer segments, the alpha-subunit of the visual G-protein transducin (Gtalpha) colocalizes with LGN in the basal part of the inner segments. LGN and Gtalpha coprecipitate from the retinal extracts, supporting the notion of the interaction between the proteins. Furthermore, the GPR domain of LGN potently inhibits receptor-mediated guanine nucleotide exchange and steady-state GTPase activity of transducin. The localization and interaction with Gtalpha suggest LGN roles in modulation of transducin translocation and other photoreceptor cell functions.