The guanine nucleotide exchange factor (GEF) was purified to apparent homogeneity from postribosomal supernatants of rabbit reticulocytes by chromatography on DEAE-cellulose and phosphocellulose, fractionation by glycerol gradients, and chromatography on Mono S and Mono Q (Pharmacia). At the Mono S step GEF is isolated as a complex with the eukaryotic polypeptide chain initiation factor 2 (eIF-2) and is separated from this factor by column chromatography on Mono Q. An emission spectrum characteristic of a reduced pyridine dinucleotide was observed when GEF was subjected to fluorescence analysis. By both coupled enzymatic analysis and chromatography on reverse-phase or Mono Q columns, the bound dinucleotide associated with GEF was determined to be NADPH. The GEF-catalyzed exchange of eIF-2-bound GDP for GTP was markedly inhibited by NAD+ and NADP+. This inhibition was not observed in the presence of equimolar concentrations of NADPH. Similarly, the stimulation of ternary complex (eIF-2 X GTP X Met-tRNAf) formation by GEF in the presence of 1 mM Mg2+ was abolished in the presence of oxidized pyridine dinucleotide. These results demonstrate that pyridine dinucleotides may be directly involved in the regulation of polypeptide chain initiation by acting as allosteric regulators of GEF activity.