Protein prenylation is a widespread process that involves the transfer of either a farnesyl or a geranylgeranyl moiety to one or more C-terminal cysteines of the target protein. Rab geranylgeranyl transferase (RabGGTase) is responsible for the largest number of individual protein prenylation events in the cell. A decade-long effort to crystallize the catalytic ternary complex of RabGGTase has remained fruitless, prompting us to use a computational approach to predict the structure of this 200-kDa assembly. On the basis of high resolution structures of two sub-complexes, we have generated a composite model where the rigid parts of the protein are represented by precomputed grid potentials, whereas the mobile parts are described in atomic details using Internal Coordinate Mechanics. Selection of the best docking solution of the flexible parts on the grid is followed by explicit atomistic refinement of the lowest energy conformations enabling realistic modeling of complex structures. Using this approach we demonstrate that the flexible C terminus of Rab7 substrate forms a series of progressively weaker and less specific interactions that channel it into the active site of RabGGTase. We have validated the computational model through biochemical experiments and demonstrated that to be prenylated RabGTPase must possess at least nine amino acids between the prenylation motif and the hydrophobic sequence anchoring the beginning of the Rab C terminus on the enzyme. This sequence, known as the C-terminal interacting motif is shown to play a dual role in Rab prenylation by contributing a significant fraction of binding energy to the catalytic complex assembly and by orienting the C terminus of RabGTPase in the vicinity of the active site of RabGGTase. This mechanism is unique to RabGGTase when compared with other prenyltransferases, which encode the specificity for their cognate substrates directly at their active site.