Gz is a member of the family of trimeric guanine nucleotide-binding regulatory proteins (G proteins), which plays a crucial role in signaling across cell membranes. The expression of Gz is predominately confined to neuronal cells and platelets, suggesting an involvement in a neuroendocrine process. Although the signaling pathway in which Gz participates is not yet known, it has been linked to inhibition of adenylyl cyclase. We have found that arachidonate and related unsaturated fatty acids suppress guanine nucleotide binding to the alpha subunit of Gz. This inhibition of nucleotide binding by cis-unsaturated fatty acids is specific for Gz alpha; other G protein alpha subunits are relatively insensitive to these lipids. The IC50 for inhibition by the lipids closely corresponds to their critical micellar concentrations, suggesting that the interaction of the lipid micelle with Gzalpha is the primary event leading to inhibition. The presence of the acidic group of the fatty acid is critical for inhibition, as no effect is observed with the corresponding fatty alcohol. While arachidonic acid produces near-complete inhibition of both GDP and guanosine 5-(3-O-thio)triphosphate binding by Gzalpha, release of GDP from the protein was unaffected. Furthermore, the rate of inactivation of Gzalpha by arachidonate is essentially identical to the rate of GDP release from the protein, indicating that GDP release is required for inactivation. These observations indicate that the mechanism of inactivation of Gzalpha by unsaturated fatty acids is through an interaction of an acidic lipid micelle with the nucleotide-free form of the protein. Although the physiologic significance of this finding is unclear, similar effects of unsaturated fatty acids on other proteins involved in cell signaling indicate potential roles for these lipids in signal modulation. Additionally, the ability of arachidonate to inactivate this adenylyl cyclase-inhibitory G protein provides a molecular mechanism for previous findings that treatment of platelets with arachidonate results in elevated cAMP levels.