The mechanism of oligomerization and its role in the regulation of activity in large GTPases are not clearly understood. Human guanylate binding proteins (hGBP-1 and 2) belonging to large GTPases have the unique feature of hydrolyzing GTP to a mixture of GDP and GMP with unequal ratios. Using a series of truncated and mutant proteins of hGBP-1, we identified a hydrophobic helix in the connecting region between the two domains that plays a critical role in dimerization and regulation of the GTPase activity. The fluorescence with 1-8-anilinonaphthalene sulfonate and circular dichroism measurements together suggest that in the absence of the substrate analog, the helix is masked inside the protein but becomes exposed through a substrate-induced conformational switch, and thus mediates dimerization. This is further supported by the intrinsic fluorescence experiment, where Leu(298) of this helix is replaced by a tryptophan. Remarkably, the enzyme exhibits differential GTPase activities depending on dimerization; a monomer produces only GDP, but a dimer gives both GDP and GMP with stimulation of the activity. An absolute dependence of GMP formation with dimerization demonstrates a cross talk between the monomers during the second hydrolysis. Similar to hGBP-1, hGBP-2 showed dimerization-related GTPase activity for GMP formation, indicating that this family of proteins follows a broadly similar mechanism for GTP hydrolysis.