Mg2+ inhibits GDP release from Rab5WT but not from Rab5S34N, a mutant lacking Ser34 critical for Mg2+ coordination in the nucleotide binding pocket. Thus, inhibition of GDP release is apparently exerted via coordination of Mg2+ between Rab5 and GDP. Mg2+ also induces conformational changes in Rab5WT, demonstrated by increased tryptophan fluorescence intensity and a red shift in lambda max for the GDP-bound protein. Mg(2+)-induced fluorescence changes are not observed for Rab5S34N. The correlation between Mg2+ effects on nucleotide exchange and the fluorescence properties of Rab5 suggests that a conformation promoted through Mg2+ coordination with Ser34 also contributes to inhibition of GDP release. The role of structural changes in GDP release was investigated using C- and N-terminal truncation mutants. Similar to Rab5WT, Mg2+ inhibits GDP release and alters the fluorescence of Rab5(1-198) but only partially inhibits release from Rab5(23-198) and fails to induce changes in the latter's fluorescence properties. Since Rab5(23-198) maintains Ser34 necessary for Mg2+ coordination, the lack of Mg(2+)-induced fluorescence changes suggests a requirement for the N-terminal domain to promote a conformation blocking GDP release. A model for mechanisms of interaction between Ras-like proteins and their exchange factors is proposed.