GTP-binding proteins of the Rho family are maintained as cytosolic complexes with RhoGDI in resting cells, but are released and translocate to the membrane during the course of cell activation. Membrane association of Rac/Rho/CDC42 was specifically induced by GTP analogs and required a heat- and trypsin-labile membrane component. Translocation was associated with the release of Rho family proteins from RhoGDI, but such release did not occur in the absence of membranes, nor was release in the absence of guanosine 5'-O-(thiotriphosphate) (GTP gamma S) sufficient for membrane association. Membrane binding was correlated with exchange of GTP gamma S for GDP on Rac, and only GTP gamma S-bound Rac became membrane localized. We propose that translocation of Rac and other members of the Rho family is controlled by membrane-associated guanine nucleotide exchange factors, providing a mechanism to regulate the release and activation of individual members of the Rho family during cell stimulation.