Small GTPases of the Rho family regulate signaling pathways that control actin cytoskeletal structures. In Swiss 3T3 cells, RhoA activation leads to stress fiber and focal adhesion formation, Rac1 to lamellipoda and membrane ruffles, and Cdc42 to microspikes and filopodia. Several downstream molecules mediating these effects have been recently identified. In this report we provide evidence that the intracellular localization of the actin binding protein cortactin, a Src kinase substrate, is regulated by the activation of Rac1. Cortactin redistributes from the cytoplasm into membrane ruffles as a result of growth factor-induced Rac1 activation, and this translocation is blocked by expression of dominant negative Rac1N17. Expression of constitutively active Rac1L61 evoked the translocation of cortactin from cytoplasmic pools into peripheral membrane ruffles. Expression of mutant forms of the serine/threonine kinase PAK1, a downstream effector of Rac1 and Cdc42 recently demonstrated to trigger cortical actin polymerization and membrane ruffling, also led to the translocation of cortactin to the cell cortex, although this was effectively blocked by coexpression of Rac1N17. Collectively these data provide evidence for cortactin as a putative target of Rac1-induced signal transduction events involved in membrane ruffling and lamellipodia formation.