Recently we found that visual arrestin binds microtubules and that this interaction plays an important role in arrestin localization in photoreceptor cells. Here we use site-directed mutagenesis and spin labeling to explore the molecular mechanism of this novel regulatory interaction. The microtubule binding site maps to the concave sides of the two arrestin domains, overlapping with the rhodopsin binding site, which makes arrestin interactions with rhodopsin and microtubules mutually exclusive. Arrestin interaction with microtubules is enhanced by several "activating mutations" and involves multiple positive charges and hydrophobic elements. The comparable affinity of visual arrestin for microtubules and unpolymerized tubulin (K(D) > 40 mum and >65 mum, respectively) suggests that the arrestin binding site is largely localized on the individual alphabeta-dimer. The changes in the spin-spin interaction of a double-labeled arrestin indicate that the conformation of microtubule-bound arrestin differs from that of free arrestin in solution. In sharp contrast to rhodopsin, where tight binding requires an extended interdomain hinge, arrestin binding to microtubules is enhanced by deletions in this region, suggesting that in the process of microtubule binding the domains may move in the opposite direction. Thus, microtubule and rhodopsin binding induce different conformational changes in arrestin, suggesting that arrestin assumes three distinct conformations in the cell, likely with different functional properties.