Prenylated Rab GTPases regulate intracellular vesicle trafficking in eukaryotic cells by associating with specific membranes and recruiting a multitude of Rab-specific effector proteins. Prenylation, membrane delivery, and recycling of all 60 members of the Rab GTPase family are regulated by two related molecules, Rab escort protein (REP) and GDP dissociation inhibitor (GDI). Biophysical analysis of the interaction of prenylated proteins is complicated by their low solubility in aqueous solutions. Here, we used expressed protein ligation to construct a semisynthetic fluorescent analogue of prenylated Rab7, Rab7-NBD-farnesyl. This molecule is soluble in the absence of detergent but is otherwise similar in its behavior to naturally prenylated Rab7 GTPase. To obtain information on the interaction of natively mono- and diprenylated Rab7 GTPases with REP and GDI molecules, we stabilized the former molecules in solution by using the beta-subunit of Rab geranylgeranyl transferase, which we demonstrate to function as an unspecific chaperone of prenylated proteins. Using competitive titrations of mixtures of natively prenylated and fluorescent Rab, we demonstrate that monogeranylgeranylated Rab7 binds to the REP protein with a K(d) value of approximately 70 pM. The affinity of doubly prenylated Rab7 is approximately 20-fold weaker. In contrast, GDI binds both prenylated forms of Rab7 with comparable affinities (K(d) = 1-5 nM) but has extremely low affinity to unprenylated Rab molecules. The obtained data allow us to formulate a thermodynamic model for the interaction of RabGTPases with their regulators and membranes and to explain the need for both REP and GDI in Rab function.