Sensory guanylate cyclases (zGCs) in zebrafish photoreceptors are regulated by a family of guanylate cyclase activator proteins (called GCAP1-7). GCAP5 contains two nonconserved cysteine residues (Cys15 and Cys17) that could in principle bind to biologically active transition state metal ions (Zn2+ and Fe2+). Here, we present nuclear magnetic resonance (NMR) and isothermal titration calorimetry (ITC) binding analyses that demonstrate the binding of one Fe2+ ion to two GCAP5 molecules (in a 1:2 complex) with a dissociation constant in the nanomolar range. At least one other Fe2+ binds to GCAP5 with micromolar affinity that likely represents electrostatic Fe2+ binding to the EF-hand loops. The GCAP5 double mutant (C15A/C17A) lacks nanomolar binding to Fe2+, suggesting that Fe2+ at this site is ligated directly by thiolate groups of Cys15 and Cys17. Size exclusion chromatography analysis indicates that GCAP5 forms a dimer in the Fe2+-free and Fe2+-bound states. NMR structural analysis and molecular docking studies suggest that a single Fe2+ ion is chelated by thiol side chains from Cys15 and Cys17 in the GCAP5 dimer, forming an [Fe(SCys)4] complex like that observed previously in two-iron superoxide reductases. Binding of Fe2+ to GCAP5 weakens its ability to activate photoreceptor human GC-E by decreasing GC activity >10-fold. Our results indicate a strong Fe2+-induced inhibition of GC by GCAP5 and suggest that GCAP5 may serve as a redox sensor in visual phototransduction.