Polypeptide chain initiation in mammalian systems is regulated at the level of the guanine nucleotide exchange factor (GEF). This multisubunit protein catalyzes the exchange of GDP bound to eukaryotic initiation factor 2 (eIF-2) for GTP. Although various models have been proposed for its mode of action, the exact sequence of events involved in nucleotide exchange is still uncertain. We have studied this reaction by three different experimental techniques: (a) membrane filtration assays to measure the release of [3H]GDP from the eIF-2.[3H]GDP binary complex, (b) changes in the steady-state polarization of fluorescamine-GDP during the nucleotide exchange reaction, and (c) sucrose gradient analysis of the total reaction. The results obtained do not support the reaction as written: eIF-2.GDP + GEF in equilibrium eIF-2.GEF + GDP. The addition of GEF alone does not result in the displacement of eIF-2-bound GDP. The release of bound GDP is dependent on the presence of both GTP and GEF, and this argues against the possibility of a substituted enzyme (ping-pong) mechanism for the guanine nucleotide exchange reaction. An important finding of the present study is the observation that GTP binds to GEF. The Kd value of 4 microM for GTP was estimated (a) by the extent of quenching of tryptophan fluorescence of GEF in the presence of GTP and (b) by the binding of [3H]GTP to GEF as measured on nitrocellulose membranes. The GEF-dependent release of eIF-2-bound GDP was studied at several constant concentrations of one substrate (GTP or eIF-2.GDP) while varying the second substrate concentration, and the results were then plotted according to the Lineweaver-Burk method. Taken together, the results of GTP and eIF-2.GDP binding to GEF and the pattern of the double-reciprocal plots strongly suggest that the guanine nucleotide exchange reaction follows a sequential mechanism.