We have studied the binding of guanyl nucleotides to retinal rod outer segment membranes to determine how light activates a cyclic GMP phosphodiesterase and a GTPase. We found that rod outer segment membranes contain tightly bound radioactive GDP after incubation in the dark with [3H]GDP or [alpha-32P]GTP. Reconstituted membranes containing only rhodopsin and phospholipid bind almost no GDP. More than 80% of the radioactive GDP bound to rod outer segment membranes could be released by subsequent illumination. At low light levels, the rate and extent of GDP release were markedly enhanced by the presence of GTP or p[NH]ppG, a nonhydrolyzable analog of GTP. The kinetics of binding of p[NH]ppG paralleled the kinetics of release of bound GDP, indicating that p[NH]ppG was exchanged for bound GDP. The maximal amount of bound p[NH]ppG was 1 per 30 rhodopsins when photolyzed membranes were incubated with 10 micro M nucleotide. Under these conditions, p[NH]ppG binding was half-maximal when only 1 in 90,000 rhodopsins was photolyzed. This corresponds to the catalyzed exchange of 500 p[NH]ppG for bound GDP per photolyzed rhodopsin. We propose a light-activated GTP-GDP amplification cycle involving a guanyl nucleotide binding protein with GTPase activity (E). The essence of this cycle is that photolyzed rhodopsin catalyzes the formation of E . GTP from E . GDP (the major species in the dark) by nucleotide exchange. The formation of several hundred E . GTP per photolyzed rhodopsin may be the first stage of amplification in visual excitation.