Eukaryotic translation initiation factor 2B (eIF2B) is the guanine nucleotide exchange factor (GEF) for eukaryotic translation initiation factor 2, which stimulates formation of the eIF2-GTP-Met-tRNA(i)(Met) ternary complex (TC) in a manner inhibited by phosphorylated eIF2 [eIF2(αP)]. While eIF2B contains five subunits, the ε/Gcd6 subunit is sufficient for GEF activity in vitro. The δ/Gcd2 and β/Gcd7 subunits function with α/Gcn3 in the eIF2B regulatory subcomplex that mediates tight, inhibitory binding of eIF2(αP)-GDP, but the essential functions of δ/Gcd2 and β/Gcd7 are not well understood. We show that the depletion of wild-type β/Gcd7, three lethal β/Gcd7 amino acid substitutions, and a synthetically lethal combination of substitutions in β/Gcd7 and eIF2α all impair eIF2 binding to eIF2B without reducing ε/Gcd6 abundance in the native eIF2B-eIF2 holocomplex. Additionally, β/Gcd7 mutations that impair eIF2B function display extensive allele-specific interactions with mutations in the S1 domain of eIF2α (harboring the phosphorylation site), which binds to eIF2B directly. Consistent with this, β/Gcd7 can overcome the toxicity of eIF2(αP) and rescue native eIF2B function when overexpressed with δ/Gcd2 or γ/Gcd1. In aggregate, these findings provide compelling evidence that β/Gcd7 is crucial for binding of substrate by eIF2B in vivo, beyond its dispensable regulatory role in the inhibition of eIF2B by eIF (αP).