Phosducin-like protein ( PhLP) exists in two splice variants PhLPLONG (PhLPL) and PhLPSHORT (PhLPS). Whereas PhLPL directly inhibits G beta gamma-stimulated signaling, the G beta gamma-inhibitory mechanism of PhLPS is not understood. We report here that inhibition of G beta gamma signaling in intact HEK cells by PhLPS was independent of direct G beta gamma binding; however, PhLPS caused down-regulation of G beta and G gamma proteins. The down-regulation was partially suppressed by lactacystine, indicating the involvement of proteasomal degradation. N-terminal fusion of G beta or G gamma with a dye-labeling protein resulted in their stabilization against down-regulation by PhLPS but did not lead to a functional rescue. Moreover, in the presence of PhLPS, stabilized G gamma subunits did not coprecipitate with stabilized G beta subunits, suggesting that PhLPS might interfere with G beta gamma folding. PhLPS and several truncated mutants of PhLPS interacted with the subunit tailless complex polypeptide-1 alpha (TCP-1 alpha) of the CCT chaperonin complex, which is involved in protein folding. Knock-down of TCP-1 alpha in HEK cells by small interfering RNA also led to down-regulation of G beta gamma. We therefore conclude that the strong inhibitory action of PhLPS on G beta gamma signaling is the result of a previously unrecognized mechanism of G beta gamma-regulation, inhibition of G beta gamma-folding by interference with TCP-1 alpha.