Eukaryotic translation initiation factor 2 (eIF-2) comprises three non-identical subunits alpha, beta and gamma. In vitro, eIF-2 binds the initiator methionyl-tRNA in a GTP-dependent fashion. Based on similarities between eukaryotic eIF-2gamma proteins and eubacterial EF-Tu proteins, we previously proposed a major role for the gamma-subunit in binding guanine nucleotide and tRNA. We have tested this hypothesis by examining the biochemical activities of yeast eIF-2 purified from wild-type strains and strains harboring mutations in the eIF-2gamma structural gene (GCD11) predicted to alter ligand binding by eIF-2. The alteration of tyrosine 142 in yeast eIF-2gamma, corresponding to histidine 66 in Escherichia coli EF-Tu, dramatically reduced the affinity of eIF-2 for Met-tRNAi(Met) without affecting the k(off) value for guanine nucleotides. In contrast, non-lethal substitutions at a conserved lysine residue (K250) in the putative guanine ring-binding loop increased the off-rate for GDP, thereby mimicking the function of the guanine nucleotide exchange factor eIF-2B, without altering the apparent dissociation constant for Met-tRNAi(Met). For eIF-2[gamma-K250R], the increased off-rate also seen for GTP was masked by the presence of Met-tRNAi(Met) in vitro. In vivo, increasing the dose of the yeast initiator tRNA gene suppressed the slow-growth phenotype and reduced GCN4 expression in gcd11-K250R and gcd11-Y142H strains. These studies indicate that the gamma-subunit of eIF-2 does indeed provide EF-Tu-like function to the eIF-2 complex, and further suggest that the level of Met-tRNAi(Met) is critical for maintaining wild-type rates of initiation in vivo.