We have identified a new guanine‐nucleotide exchange factor, P‐Rex2, and cloned it from human skeletal muscle and brain libraries. It has widespread tissue distribution but is not expressed in neutrophils. P‐Rex2 is a 183 kDa protein that activates the small GTPase Rac and is regulated by phosphatidylinositol (3,4,5)‐trisphosphate and the βγ subunits of heterotrimeric G proteins in vitro and in vivo. P‐Rex2 has structure, activity and regulatory properties similar to P‐Rex1 but has divergent tissue distribution, as P‐Rex1 is mainly expressed in neutrophils. Together, they form an enzyme family capable of mediating Rac signalling downstream of G protein‐coupled receptors and phosphoinositide 3‐kinase.