The Rho family of GTPases represents a class of Ras-related signaling molecules often deregulated in cancer. Rho GTPases switch from a GDP-bound, inactive state to a GTP-bound, active state in response to extracellular stimuli such as mitogens and extracellular matrix. In addition, Rho GTPase signaling can be altered in response to cell intrinsic factors such as changes in oncogenic or tumor suppressor signaling. In their active form, these proteins bind to a number of effector molecules, activating signaling cascades which regulate a variety of cellular processes including cytoskeletal reorganization, cell cycle progression, cell polarity and transcription. Here, we focus on one Rho family member, Cdc42, which is overexpressed in a number of human cancers. Consistent with a role in the promotion of tumorigenesis, activating mutations in Cdc42 and guanine nucleotide exchange factors are transforming, while inhibition of Cdc42 activity can impinge on cellular transformation following the activation of oncoproteins or loss of tumor suppressor function. Furthermore, Cdc42 activity has been implicated in the invasive phenotype which characterizes tumor metastasis, further suggesting that Cdc42 may be a useful target for therapeutic intervention. However, several recent studies in mice have unveiled a putative tumor suppressor function of Cdc42 in several tissue types which may involve cell polarity maintenance, suggesting that the role of Cdc42 in cancer development is complex and may be cell type specific.