Autosomal dominant mutations in leucine rich repeat kinase 2 (LRRK2) are the most common genetic cause of Parkinson's disease (PD). Despite the presence of multiple domains, the kinase activity of LRRK2 is thought to represent the primary function of the protein. Alterations in LRRK2 kinase activity are thought to underlie the pathogenesis of its PD-linked mutations; however, many questions regarding basic aspects of LRRK2 function remain unclear, including the cellular mechanisms of LRRK2 regulation and the importance of its unique distribution within the cell. Here, we demonstrate for the first time that the subcellular localization of wild-type LRRK2 is associated with changes in four distinct biochemical properties likely crucial for LRRK2 function. Our data demonstrate for the first time that the wild-type LRRK2 dimer possesses greater kinase activity than its more abundant monomeric counterpart. Importantly, we show that this activated form of LRRK2 is substantially enriched at the membrane of cells expressing endogenous or exogenous LRRK2, and that the membrane-associated fraction of LRRK2 likewise possesses greater kinase activity than cytosolic LRRK2. In addition, membrane-associated LRRK2 binds GTP more efficiently than cytosolic LRRK2 but demonstrates a lower degree of phosphorylation. Our observations suggest that multiple events, including altered protein-protein interactions and post-translational modifications, contribute to the regulation of LRRK2 function, through modulation of membrane association and complex assembly. These findings may have implications for the sites of LRRK2 function within the cell, the identification and localization of bona fide LRRK2 substrates, and efforts to design small molecule inhibitors of LRRK2.