Targeting of newly synthesized membrane proteins to the endoplasmic reticulum is an essential cellular process. Most membrane proteins are recognized and targeted co-translationally by the signal recognition particle. However, nearly 5% of membrane proteins are 'tail-anchored' by a single carboxy-terminal transmembrane domain that cannot access the co-translational pathway. Instead, tail-anchored proteins are targeted post-translationally by a conserved ATPase termed Get3. The mechanistic basis for tail-anchored protein recognition or targeting by Get3 is not known. Here we present crystal structures of yeast Get3 in 'open' (nucleotide-free) and 'closed' (ADP.AlF(4)(-)-bound) dimer states. In the closed state, the dimer interface of Get3 contains an enormous hydrophobic groove implicated by mutational analyses in tail-anchored protein binding. In the open state, Get3 undergoes a striking rearrangement that disrupts the groove and shields its hydrophobic surfaces. These data provide a molecular mechanism for nucleotide-regulated binding and release of tail-anchored proteins during their membrane targeting by Get3.