The generation of reactive oxygen species, particularly H(2)O(2), from alveolar macrophages is causally related to the development of pulmonary fibrosis. Rac1, a small GTPase, is known to increase mitochondrial H(2)O(2) generation in macrophages; however, the mechanism by which this occurs is not known. This study shows that Rac1 is localized in the mitochondria of alveolar macrophages from asbestosis patients, and mitochondrial import requires the C-terminal cysteine of Rac1 (Cys-189), which is post-translationally modified by geranylgeranylation. Furthermore, H(2)O(2) generation mediated by mitochondrial Rac1 requires electron transfer from cytochrome c to a cysteine residue on Rac1 (Cys-178). Asbestos-exposed mice harboring a conditional deletion of Rac1 in macrophages demonstrated decreased oxidative stress and were significantly protected from developing pulmonary fibrosis. These observations demonstrate that mitochondrial import and direct electron transfer from cytochrome c to Rac1 modulates mitochondrial H(2)O(2) production in alveolar macrophages pulmonary fibrosis.