Photoactivation of the retinal photoreceptor rhodopsin proceeds through a cascade of intermediates, resulting in protein-protein interactions catalyzing the activation of the G-protein transducin (Gt), Using stabilization and photoregeneration of the receptor's signaling state and Gt activation assays, we provide evidence for a two-site sequential fit mechanism of Gt activation. We show that the C-terminal peptide from the Gt gamma-subunit, Gt gamma(50-71)farnesyl, can replace the holoprotein in stabilizing rhodopsin's active intermediate metarhodopsin II (MII). However, the peptide cannot replace the Gt beta gamma complex in direct activation assays. Competition by Gt gamma(50-71)farnesyl with Gt for the active receptor suggests a pivotal role for Gt beta gamma in signal transfer from MII to Gt. MII stabilization and competition is also found for the C-terminal peptide from the Gt alpha-subunit, Gt alpha(340-350), but the capacity of this peptide to interfere in MII-Gt interactions is paradoxically low compared with its activity to stabilize MII. Besides this disparity, the pH profiles of competition with Gt are characteristically different for the two peptides, We propose a two-site sequential fit model for signal transfer from the activated receptor, R*, to the G-protein. In the center of the model is specific recognition of conformationally distinct sites of R* by Gt alpha(340-350) and Gt gamma(50-71)farnesyl. One matching pair of domains on the proteins would, on binding, lead to a conformational change in the G-protein and/or receptor, with subsequent binding of the second pair of domains. This process could be the structural basis for GDP release and the formation of a stable empty site complex that is ready to receive the activating cofactor, GTP.