Rac and Cdc42, like all members of the Ras superfamily, act as molecular switches, cycling between an inactive GDP-bound state and an active GTPbound state. Until recently, members of the Rho-subfamily were believed to be primarily involved in the regulation of cytoskeletal organization in response to extracellular growth factors. However, studies from numerous groups over the past few years have revealed that the Rho-GTPases play crucial roles in a wide variety of biological processes such as transcriptional regulation, cell growth control, membrane trafficking including endocytosis, exocytosis and phagocytosis, as well as development (Fig. 1). The signal transduction pathways mediating these biological phenomena are complex and intricately interwoven. A major challenge has been the identification of downstream effector molecules by which Rac and Cdc42 mediate these activities. Numerous targets of Rac and Cdc42 have been identified (Fig. 2) and further characterization of some of them has led to a better understanding of the function Rac and Cdc42 display at the molecular level. The different Rac and Cdc42 specific effectors and our current understanding of their physiological roles are the major focus of this chapter.