Cdc42 mediates several signaling pathways leading to actin reorganization, transcriptional activation, and cell cycle control. Mutational analysis of Cdc42 has revealed that actin reorganization and transcriptional activation are induced through independent signaling pathways. The Y40C effector mutant of Cdc42 no longer interacts with many of its known target proteins, such as p65(PAK) and WASP, yet this mutant can still induce filopodia formation. To identify Cdc42 targets involved in actin rearrangements, we have screened a yeast two-hybrid cDNA library using the Y40C mutant of Cdc42 as a bait. We report here the identification of a novel serine- and proline-rich GTPase-activating protein, CdGAP, which is active in vitro on both Cdc42 and Rac. Microinjection of CdGAP into serum-starved fibroblasts inhibits both platelet-derived growth factor-induced lamellipodia and bradykinin-induced filopodia mediated by Rac and Cdc42, respectively. CdGAP does not show in vitro activity toward Rho, and it has no effect on lysophosphatidic acid-induced stress fiber formation when microinjected into fibroblasts. The carboxyl terminus of CdGAP reveals potential protein kinase C phosphorylation sites and five SH3 binding motifs. Thus, CdGAP is a novel GAP that is likely to participate in Cdc42- and Rac-induced signaling pathways leading to actin reorganization.