Members of the RabGDI/REP family serve as multifunctional regulators of the Rab family of GTP binding proteins. Mutations in members of this family, such as REP-1, lead to abnormalities, including progressive retinal degradation (choroideremia) in humans. The crystal structures of the REP-1 protein in complex with monoprenylated or C-terminally truncated Rab7 proteins revealed that Rab7 interacts with the Rab binding platform of REP-1 via an extended interface involving the Switch 1 and 2 regions. The C terminus of the REP-1 molecule functions as a mobile lid covering a conserved hydrophobic patch on the surface of REP-1 that in the complex coordinates the C terminus of Rab proteins. Using semisynthetic fluorescent Rab27A, we demonstrate that although Rab27A can be prenylated by REP-2, this reaction can be effectively inhibited by other Rab proteins, providing a possible explanation for the accumulation of unprenylated Rab27A in choroideremia.