During cotranslational protein targeting by the signal recognition particle (SRP), information about signal sequence binding in the SRP's M domain must be effectively communicated to its GTPase domain to turn on its interaction with the SRP receptor (SR) and thus deliver the cargo proteins to the membrane. A universally conserved “fingerloop” lines the signal sequence–binding groove of SRP; the precise role of this fingerloop in protein targeting has remained elusive. In this study, we show that the fingerloop plays important roles in SRP function by helping to induce the SRP into a more active conformation that facilitates multiple steps in the pathway, including efficient recruitment of SR, GTPase activation in the SRP•SR complex, and most significantly, the unloading of cargo onto the target membrane. On the basis of these results and recent structural work, we propose that the fingerloop is the first structural element to detect signal sequence binding; this information is relayed to the linker connecting the SRP's M and G domains and thus activates the SRP and SR for carrying out downstream steps in the pathway.