Guanine nucleotide dissociation inhibitor (GDI) is a 55-kDa protein that functions in vesicular membrane transport to recycle Rab GTPases. We have now determined the crystal structure of bovine alpha-GDI at ultra-high resolution (1.04 A). Refinement at this resolution highlighted a region with high mobility of its main-chain residues. This corresponded to a surface loop in the primarily alpha-helical domain II at the base of alpha-GDI containing the previously uncharacterized sequence-conserved region (SCR) 3A. Site-directed mutagenesis showed that this mobile loop plays a crucial role in binding of GDI to membranes and extraction of membrane-bound Rab. This domain, referred to as the mobile effector loop, in combination with Rab-binding residues found in the multi-sheet domain I at the apex of alpha-GDI may provide flexibility for recycling of diverse Rab GTPases. We propose that conserved residues in domains I and II synergize to form the functional face of GDI, and that domain II mediates a critical step in Rab recycling during vesicle fusion.