Isoprenylated proteins are associated with membranes and their inter-compartmental distribution is regulated by solubilization factors, which incorporate lipid moieties in hydrophobic cavities and thereby facilitate free diffusion during trafficking. Here we report the crystal structure of a solubilization factor, the prenyl-binding protein (PrBP/δ), at 1.81 Å resolution in its ligand-free apo-form. Apo-PrBP/δ harbors a preshaped, deep hydrophobic cavity, capacitating apo-PrBP/δ to readily bind its prenylated cargo. To investigate the molecular mechanism of cargo solubilization we analyzed the PrBP/δ-induced membrane dissociation of rod photoreceptor phosphodiesterase (PDE6). The results suggest that PrBP/δ exclusively interacts with the soluble fraction of PDE6. Depletion of soluble species in turn leads to dissociation of membrane-bound PDE6, as both are in equilibrium. This "solubilization by depletion" mechanism of PrBP/δ differs from the extraction of prenylated proteins by the similar folded solubilization factor RhoGDI, which interacts with membrane bound cargo via an N-terminal structural element lacking in PrBP/δ.