Nitrogen fixation in some diazotrophic bacteria is regulated by mono-ADP-ribosylation of dinitrogenase reductase (NifH) that occurs in response to addition of ammonium to the extracellular medium. This process is mediated by dinitrogenase reductase ADP-ribosyltransferase (DraT) and reversed by dinitrogenase reductase glycohydrolase (DraG), but the means by which the activities of these enzymes are regulated are unknown. We have investigated the role of the P(II) proteins (GlnB and GlnZ), the ammonia channel protein AmtB and the cellular localization of DraG in the regulation of the NifH-modification process in Azospirillum brasilense. GlnB, GlnZ and DraG were all membrane-associated after an ammonium shock, and both this membrane sequestration and ADP-ribosylation of NifH were defective in an amtB mutant. We now propose a model in which membrane association of DraG after an ammonium shock creates a physical separation from its cytoplasmic substrate NifH thereby inhibiting ADP-ribosyl-removal. Our observations identify a novel role for an ammonia channel (Amt) protein in the regulation of bacterial nitrogen metabolism by mediating membrane sequestration of a protein other than a P(II) family member. They also suggest a model for control of ADP-ribosylation that is likely to be applicable to all diazotrophs that exhibit such post-translational regulation of nitrogenase.