RhoG is a new GTPase that has high sequence similarity with members of the Rac subfamily (Rac1, Rac2, and Rac3), including the regions involved in effector recognition and binding. To characterize its biological properties, we have compared the activity of RhoG and Rac1 in a number of experimental systems, including the study of their subcellular localization, oncogenic potential, activation of effectors, and effect on F-actin dynamics. Our study indicates that RhoG and Rac1 share overlapping, but not identical, signal transduction pathways. In contrast to previous results, we also provide evidence that RhoG works in parallel to Rac1 rather than as a Rac1 upstream activator. Using an extensive collection of Rho/Rac1 chimeras and point mutants, we demonstrate that the different biological properties of RhoG and Rac1 can be traced to specific amino acid variations in their switch I, beta2/beta3 hairpin, alpha5 helix, and C-terminal polybasic regions. Taken collectively, our results highlight the complexity of the signal transduction pathways activated by Rho/Rac GTPases and provide insight into the structural determinants that mediate the differential engagement of biological responses by GTPases of very similar structure.