The G protein beta gamma complex regulates a wide range of effectors, including the phospholipase C beta isozymes (PLC betas). Prenyl modification of the gamma subunit is necessary for this activity. Evidence presented here supports a direct interaction between the G protein gamma subunit prenyl group and PLC isozymes. A geranylgeranylated peptide corresponding to the C-terminal region of the gamma subunit type, gamma2, strongly inhibits stimulation of PLC beta2 and PLC beta3 activity by the beta gamma complex. This effect is specific because the same peptide has no effect on stimulation of PLC beta by an a subunit type, alphaq. Prenylation of the gamma peptide is required for its inhibitory effect. W interaction of prenylated gamma subunit peptide to fluophore-tagged PLC beta2 was examined by fluorescence spectroscopy, prenylated but not unprenylated peptide increased PLC beta2 fluorescence emission energy, indic ting direct binding of the prenyl moiety to PLC. In addition, fluorescence resonance energy transfer was detected between fluorophore tagged PLC beta and wild type Py complex but not an unprenylated mutant beta gamma complex. We conclude that a major function of the gamma subunit prenyl group is to facilitate direct protein-protein interaction between the beta gamma complex and an effector, phospholipase C beta.