Recombinant wild-type beta 1 gamma 1 dimers of signal-transducing guanine nucleotide-binding proteins (G proteins) and beta 1 gamma 1 dimers carrying a mutation known to block gamma-subunit isoprenylation (beta 1 gamma 1 C71S) were expressed in baculovirus-infected insect cells. Both wild-type and mutant beta 1 gamma 1 dimers were found in soluble fractions of infected cells upon subcellular fractionation. Anion exchange chromatographic and metabolic-radiolabeling studies revealed that the soluble beta 1 gamma 1 preparation contained approximately equal amounts of non-isoprenylated and isoprenylated beta 1 gamma 1 dimers. Soluble wild-type and mutant beta 1 gamma 1 dimers and native beta 1 gamma 1 dimers purified from bovine retina were reconstituted with recombinant phospholipase C-beta 2. Only isoprenylated beta 1 gamma 1 dimers were capable of stimulating phospholipase C-beta 2. The results show that gamma-subunit isoprenylation and/or additional post-translational processing of the protein are required for beta gamma subunit stimulation of phospholipase C.