The surfaces of heterotrimeric G proteins (alphabetagamma) in contact with receptors and the molecular events at these sites, which lead to G protein activation, are largely unknown. We show here that a peptide from the C terminus of a G protein gamma subunit blocks muscarinic receptor-stimulated G protein activation in a sequence-dependent fashion. A G protein mutated at the same site on the gamma subunit shows enhanced receptor stimulated nucleotide exchange without affecting G protein heterotrimerization. Ineffective contact between the gamma subunit and receptor increases the rate of receptor-stimulated nucleotide exchange. Specific interaction of the G protein gamma subunit with the receptor thus helps the betagamma complex to act at a distance and control guanine nucleotide exchange in the alpha subunit.