G-Proteins cycle between an inactive GDP-bound state and an active GTP-bound state, serving as molecular switches that coordinate cellular signaling. We recently used phage display to identify a series of peptides that bind Gα subunits in a nucleotide-dependent manner [Johnston, C. A., Willard, F. S., Jezyk, M. R., Fredericks, Z., Bodor, E. T., Jones, M. B., Blaesius, R., Watts, V. J., Harden, T. K., Sondek, J., Ramer, J. K., and Siderovski, D. P. (2005) Structure 13, 1069-1080]. Here we describe the structural features and functions of KB-1753, a peptide that binds selectively to GDP·A1F4-- and GTPγS-bound states of Gαi subunits. KB-1753 blocks interaction of Gotransducin with its effector, cGMP phosphodiesterase, and inhibits transducin-mediated activation of cGMP degradation. Additionally, KB-1753 interferes with RGS protein binding and resultant GAP activity. A fluorescent KB-1753 variant was found to act as a sensor for activated Gα in vitro. The crystal structure of KB-1753 bound to Gαil·GDP·AlF4 - reveals binding to a conserved hydrophobic groove between switch II and α3 helices and, along with supporting biochemical data and previous structural analyses, supports the notion that this is the site of effector interactions for Gαi subunits.