Although a role for the beta gamma-subunits of heterotrimeric G proteins (G beta gamma) in signal transduction by several cellular systems has been established, the structural features of cellular proteins interacting with G beta gamma have yet to be fully elucidated. The G beta gamma-binding region of beta-adrenergic receptor kinase (beta ARK), a cytosolic enzyme recruited to the membrane receptor substrate by G beta gamma, has been localized to the carboxyl terminus of the enzyme. Here, we demonstrate that the amino terminus of phosducin, a 33-kDa G beta gamma-binding retinal phosphoprotein, contains sequences homologous with the G beta gamma-binding domain of beta ARK. Accordingly, a glutathione S-transferase-fusion protein containing only the amino-terminal 105 amino acids of phosducin displayed G beta gamma binding ability. This domain of phosducin contains a protein kinase A (PKA) phosphorylation site, and upon phosphorylation, the binding of full-length phosducin to G beta gamma is reduced. In addition, transient expression of phosducin in COS-7 cells significantly inhibits G beta gamma-mediated phosphoinositide hydrolysis. This inhibitory effect is completely reversed by pretreatment of cells with dibutyryl cAMP, an activator of PKA. Thus, the binding of G beta gamma to phosducin can be regulated by PKA-phosphorylation in an intact cell model system.