For their function in fusion and signaling, Rab GTPases need to be converted into their active GTP form. We previously identified the conserved Mon1-Ccz1 complex as the guanine nucleotide exchange factor (GEF) of the yeast Rab7 GTPase Ypt7. To address the possible GEF mechanism, we generated a homology model of the predicted longin domains of Mon1 and Ccz1 using as template the Rab-binding surface of the TRAPP complex. Based on this, we identified mutations in both yeast Mon1 and Ccz1 that block Ypt7 activation, without affecting heterodimer formation and intracellular localization of Mon1 and Ccz1 at endosomes. Strikingly, the activity of the isolated Mon1-Ccz1 complex for Ypt7 is highly stimulated on membranes, and is promoted by the same anionic phospholipids such as phosphatidylinositol-3-phosphate (PI-3-P) that also support membrane-association of the GEF complex. Our data imply that the GEF activity of the Mon1-Ccz1 complex towards Rab7/Ypt7 requires the interface formed by their longin domains and profits strongly from its association with the organelle surface.