Abstract G protein β and γ subunits function as a tightly associated complex. We show that complex formation with the β subunit is a critical step for post-translational processing of a γ subunit. When expressed alone in a cell line, the γ3 subunit type is isoprenylated but degraded; co-expression with theβ1 subunit type stabilizes the γ3 protein. Furthermore, our experiments with partial cell fractionation indicate that the γ3 protein is localized differently in the cell depending on whether or not it is bound to the β subunit. Binding of the γ subunit to the β subunit is thus one of the prerequisites for the appropriate intracellular localization of the βγ complex and potentially, for normal G-protein function.