Cdc42 is a member of the Rho family of GTPases and plays an important role in the regulation of actin cytoskeletal organization. Activation of Cdc42 and associated signal transduction cascades are dependent upon proper localization of this GTPase. The studies described herein address the hypothesis that Rho GDP-dissociation inhibitor, RhoGDI, plays an essential role in the translocation of Cdc42 to signaling complexes at the plasma membrane and is essential for Cdc42-mediated actin cytoskeletal rearrangements. An activating mutant of Cdc42 that is RhoGDI-binding defective (Cdc42(G12V/R66E)) is characterized and used as a tool to study the functional importance of the Cdc42-RhoGDI interaction. Overexpression of mycCdc42(G12V/R66E) in COS-7 cells results in actin cytoskeletal rearrangements that are indistinguishable from those stimulated by overexpression of mycCdc42(G12V). In addition, the G12V activating mutant of Cdc42 was overexpressed in mesangial cells that are null for RhoGDI expression. MycCdc42(G12V) stimulation of filopodia formation in these cells was indistinguishable from that observed in wild-type mesangial cells. Taken together, the results presented herein indicate that although RhoGDI is a critical regulator of guanine nucleotide binding, cycling of Cdc42 between membranes and the cytosol and cellular transformation, it is not essential for Cdc42-mediated organization of the actin cytoskeleton.