Geranylgeranylation is a post-translational modification of Rab GTPases that enables them to associate reversibly with intracellular membranes. Geranylgeranylation of Rab proteins is critical for their activity in controlling intracellular membrane transport. According to the currently accepted model for their action, newly synthesized Rab proteins are recruited by Rab escort protein (REP) and are presented to the Rab geranylgeranyl transferase (RabGGTase) which covalentely modifies the Rab protein with two geranylgeranyl moieties. After prenylation, the Rab protein remains in complex with REP and is delivered to the target membrane by the latter. In this work, we show that RabGGTase can form a stable complex with Rab7-REP in the absence of its lipid substrate geranylgeranyl pyrophosphate. In order to characterize this interaction, we developed three fluorescence assays reporting on the interaction of RabGGTase with the Rab7-REP complex. For this interaction we determined a Kd value of about 120 nM. Association of RabGGTase with the Rab7-REP complex occurs with a rate constant of approximately 108 M-1 x s-1. We demonstrate that the state of the nucleotide bound to Rab7 does not influence the affinity of RabGGTase for the Rab7-REP-1 complex. Finally, we address the issue of substrate specificity of RabGGTase. Titration experiments demonstrate that, in contrast with farnesyl transferase, RabGGTase does not recognize a defined C-terminal sequence motif. Experiments using Rab7 mutants in which the last 16 amino acids were either mutated or truncated revealed that the distal part of the C-terminus makes only a limited contribution to the binding affinity between RabGGTase and the Rab7-REP-1 complex. This demonstrates the functional dissimilarity between RabGGTase and geranylgeranyl transferase I and farnesyl transferase, which interact specifically with the C-terminus of their substrates. Based on these experiments, we propose that RabGGTase recognizes the overall structure arising from the association of Rab and REP and then 'scans' the flexible C-terminus to position the proximal cysteines into the active site.