The gamma subunit of the retinal cGMP phosphodiesterase (gammaPDE) acts as an inhibitor of phosphodiesterase (PDE) catalytic activity and mediates enzyme regulation by the alpha subunit of the GTP-binding protein transducin (alphaT). In order to characterize conformational changes in the 87-amino acid gammaPDE subunit that may accompany the activation of the holoenzyme, gammaPDE was labeled with the fluorescent probes 5-iodoacetamidofluorescein and eosin-5-isothiocyanate for use in resonance energy transfer measurements. 5-Iodoacetamidofluorescein specifically labeled a cysteine residue at position 68 and served as a resonance energy transfer donor. The site of modification of eosin-5-isothiocyanate, which served as the resonance energy transfer acceptor, was determined to be within the first seven residues of the amino terminus of gammaPDE. Energy transfer between the labeled sites on free, unbound gammaPDE indicated that they were separated by a distance of 63 A, consistent with a random conformation. Upon binding the catalytic alphabeta subunits of the PDE, the distance between the two probes on gammaPDE increased to 77 A. Binding of the labeled gammaPDE by alphaT.guanosine 5'-3-O-(thio)triphosphate did not affect the distance between the probes under conditions where the PDE was activated. These data are consistent with the view that the binding of activated alphaT to gammaPDE, which is essential for the stimulation of PDE activity, does not impart significant alterations in the tertiary structure of the gammaPDE molecule. They also support a model for PDE activation that places active alphaT in a complex with the holoenzyme.