G protein interacting protein 1 (Gip1) binds and sequesters heterotrimeric G proteins in the cytosolic pool, thus regulating G protein-coupled receptor (GPCR) signalling for eukaryotic chemotaxis. Here, we report the underlying structural basis of Gip1 function. The crystal structure reveals that the region of Gip1 that binds to the G protein has a cylinder-like fold with a central hydrophobic cavity composed of six α-helices. Mutagenesis and biochemical analyses indicate that the hydrophobic cavity and the hydrogen bond network at the entrance of the cavity are essential for complex formation with the geranylgeranyl modification on the Gγ subunit. Mutations of the cavity impair G protein sequestration and translocation to the membrane from the cytosol upon receptor stimulation, leading to defects in chemotaxis at higher chemoattractant concentrations. These results demonstrate that the Gip1-dependent regulation of G protein shuttling ensures wide-range gradient sensing in eukaryotic chemotaxis.