Eukaryotic initiation factor-2B (eIF-2B) is a guanine nucleotide exchange factor (GEF) that plays a key role in the regulation of protein synthesis. In this study, we have used the baculovirus-infected Sf9 insect cell system to express and characterize the five dissimilar subunits of rat eIF-2B. GEF activity was detected in extracts of Sf9 cells expressing the epsilon-subunit alone and was greatly increased when all five subunits were coexpressed. In addition, high GEF activity was observed in extracts containing a four-subunit complex lacking the alpha-subunit. Assembly of an eIF-2B holoprotein was confirmed by coimmunoprecipitation of all five subunits. Gel filtration chromatography revealed that recombinant eIF-2B had the same molecular mass as eIF-2B purified from rat liver and that it did indeed possess GEF activity. Phosphorylation of the substrate eIF-2 inhibited the GEF activity of the five-subunit eIF-2B; this inhibition required the eIF-2B alpha-subunit. The results demonstrate that eIF-2Balpha functions as a regulatory subunit that is not required for GEF activity, but instead mediates the regulation of eIF-2B by substrate phosphorylation. Furthermore, eIF-2Bepsilon is necessary and is perhaps sufficient for GEF activity in vitro.