Formation of the ternary complex Met-tRNAi X eukaryotic initiation factor (eIF) 2 X GTP from eIF-2 X GDP requires exchange of GDP for GTP. However, at physiological Mg2+ concentrations, GDP is released from eIF-2 exceedingly slowly (Clemens, M.J., Pain, V.M., Wong, S.T., and Henshaw, E.C. (1982) Nature (Lond.) 296, 93-95). However, GDP is released rapidly from impure eIF-2 preparations, indicating the presence of a GDP/GTP exchange factor. We have now purified this factor from Ehrlich cells and refer to it as GEF. CM-Sephadex chromatography of ribosomal salt wash separated two peaks of eIF-2 activity. GEF was found in association with eIF-2 in the first peak and co-purified with eIF-2 under low salt conditions. It was separated from eIF-2 in high salt buffers and further purified on hydroxylapatite and phosphocellulose. Gel electrophoresis of our purest preparations showed major bands at 85, 67, 52, 37, 27, and 21 kDa. Purified GEF increased the rate of exchange of [32P] GDP for unlabeled GDP 25-fold but did not function with phosphorylated eIF-2 (alpha subunit). The factor also stimulated markedly the rate of ternary complex formation using eIF-2 X GDP as substrate with GTP and Met-tRNAi but not using phosphorylated eIF-2 X GDP as substrate. eIF-2 is released from the 80 S initiation complex with hydrolysis of GTP. If eIF-2 X GDP is actually the complex released, then GEF is absolutely required for eIF-2 to cycle and it is therefore a new eukaryotic initiation factor. Furthermore, the inability of GEF to utilize eIF-2 (alpha P) X GDP explains how phosphorylation of eIF-2 can inhibit polypeptide chain initiation.