The central effector of visual transduction in retinal rod photoreceptors, cGMP phosphodiesterase (PDE6), is a catalytic heterodimer (alphabeta) to which low molecular weight inhibitory gamma subunits bind to form the nonactivated PDE holoenzyme (alphabetagamma(2)). Although it is known that gamma binds tightly to alphabeta, the binding affinity for each gamma subunit to alphabeta, the domains on gamma that interact with alphabeta, and the allosteric interactions between gamma and the regulatory and catalytic regions on alphabeta are not well understood. We show here that the gamma subunit binds to two distinct sites on the catalytic alphabeta dimer (K(D)(1) < 1 pm, K(D)(2) = 3 pm) when the regulatory GAF domains of bovine rod PDE6 are occupied by cGMP. Binding heterogeneity of gamma to alphabeta is absent when cAMP occupies the noncatalytic sites. Two major domains on gamma can interact independently with alphabeta with the N-terminal half of gamma binding with 50-fold greater affinity than its C-terminal, inhibitory region. The N-terminal half of gamma is responsible for the positive cooperativity between gamma and cGMP binding sites on alphabeta but has no effect on catalytic activity. Using synthetic peptides, we identified regions of the amino acid sequence of gamma that bind to alphabeta, restore high affinity cGMP binding to low affinity noncatalytic sites, and retard cGMP exchange with both noncatalytic sites. Subunit heterogeneity, multiple sites of gamma interaction with alphabeta, and positive cooperativity of gamma with the GAF domains are all likely to contribute to precisely controlling the activation and inactivation kinetics of PDE6 during visual transduction in rod photoreceptors.