Protein geranylgeranyltransferase type-I (GGTase-I), one of two CaaX prenyltransferases, is an essential enzyme in eukaryotes. GGTase-I catalyzes C-terminal lipidation of >100 proteins, including many GTP- binding regulatory proteins. We present the first structural information for mammalian GGTase-I, including a series of substrate and product complexes that delineate the path of the chemical reaction. These structures reveal that all protein prenyltransferases share a common reaction mechanism and identify specific residues that play a dominant role in determining prenyl group specificity. This hypothesis was confirmed by converting farnesyltransferase (15-C prenyl substrate) into GGTase-I (20-C prenyl substrate) with a single point mutation. GGTase-I discriminates against farnesyl diphosphate (FPP) at the product turnover step through the inability of a 15-C FPP to displace the 20-C prenyl-peptide product. Understanding these key features of specificity is expected to contribute to optimization of anti-cancer and anti-parasite drugs.