Over a hundred proteins in eukaryotic cells carry a C-terminal CaaX box sequence, which targets them for posttranslational isoprenylation of the cysteine residue. This modification, catalyzed by either farnesyl or geranylgeranyl transferase, converts them into peripheral membrane proteins. Isoprenylation is usually followed by proteolytic cleavage of the aaX tripeptide and methylation of the carboxyl group of the newly exposed isoprenylcysteine. The C-terminal modification regulates the cellular localization and biological activity of isoprenylated proteins. We have established a strategy to produce and purify recombinant farnesylated guanylate-binding protein 1 (hGBP1), a dynamin-related large GTPase. Our system is based on the coexpression of hGBP1 with the two subunits of human farnesyltransferase in Escherichia coli and a chromatographic separation of farnesylated and unmodified protein. Farnesylated hGBP1 displays altered GTPase activity and is able to interact with liposomes in the activated state.