The photon receptor, rhodopsin, and the GTP-binding regulatory protein, transducin, belong to a family of G protein-coupled receptors. The activation process through which guanine nucleotide exchange of the G protein is accomplished was investigated utilizing these components of the visual transduction system. Rhodopsin, modelled as an enzyme in its interaction with substrates, transducin and guanine nucleotides, was characterized to catalyze the G protein's activation by a double-displacement mechanism. Remarkable allosteric behavior was observed in these kinetic studies. Equilibrium binding studies were performed to investigate the molecular basis of the positive cooperative behavior between transducin and rhodopsin. These experiments show that the origins of the allosterism must arise from oligomeric assemblies between receptor and G protein. The determined Hill coefficient, n_H = 2, suggests that at least two transducin molecules are involved, and the B_max parameter a1so indicates that multimeric assemblies of rhodopsin may participate in the positive cooperative interactiions. Physical studies of transducin in solution were performed and do not indicate the existence of a dimeric structure, in contrast to the kinetic and binding experiments which analyze interactions at the membrane surface. Since the latter environment represents the native surroundings in vivo, aspects of the allosteric behavior must be considered for a complete understanding of the signal transduction mechanism. The reported findings are interpreted in the context of homologies between other G protein-coupled receptor systems in order to develop a model for the molecular basis of the mechanism and regulation of this mode of signal transduction.