Mg2+ is essential for guanosine triphosphatase activity and plays key roles in guanine nucleotide binding and preserving the structural integrity of GTP-binding proteins. To understand the structural basis for Mg2+ function during the GDP/GTP exchange process, we determined the crystal structure of Delta 9-Sar1-GDP at low Mg2+ concentration at 1.8 angstrom. Two Sarl-GDP molecules in the crystal form a dimer with Mg2+ presenting only in molecule B but not in molecule A. The absence of Mg2+ induces significant conformational changes in the switch I region in molecule A that shows similarities with those of Ha-Ras bound to Sos. The current structure reveals an important regulatory role for Mg2+. We suggest that guanine nucleotide exchange factor may utilize this feature to generate an open conformation for GDP/GTP exchange. Furthermore, we propose a mechanism for COPII assembly and disassembly in which dimerization of Sar1 plays an important role. (c) 2006 Elsevier Inc. All rights reserved.