The family of p21-activated kinases (PAKs) has been shown to contain a domain that can independently bind to the Ras-like proteins Cdc42Hs and Rac. We have expressed a 72 amino acid recombinant form of this p21-binding domain (PBD) from mPAK-3 in Escherichia Coli for use in structure-function studies. The protein can be purified on a nickel affinity resin due to a hexa-His tag that is incorporated onto the amino terminus of the domain. PBD binds to Cdc42Hs in a guanine nucleotide-dependent manner as demonstrated by a novel fluorescence assay that takes advantage of the spectroscopic properties of N-methylanthraniloyl (Mant)-guanine nucleotides. Ionic strength has little effect on the affinity of PBD for Cdc42Hs, but alkaline pH values tend to weaken the interaction. We have shown that the inhibition of the GTPase activity of Cdc42Hs, as well as a previously undescribed inhibition of guanine nucleotide dissociation, is mediated by the PBD portion of the mPAK-3 molecule. These findings suggest that PBD binding alters the geometry of the guanine nucleotide binding site on Cdc42Hs, perhaps as an outcome of the target/effector molecule binding in close proximity to the nucleotide domain. We therefore tested if mutations in the effector region of Cdc42Hs (32-40), which in Ras are very close to the guanine nucleotide binding site, had any effect on PBD binding. Changing tyrosine 32 to lysine (Y32K) resulted in a small (5-fold) inhibition of PBD binding, but the very conservative mutation D38E yielded at least a 50-fold decrease in affinity. Finally, the catalytic domain of the GTPase activating protein, Cdc42-GAP, was shown to inhibit PBD binding in a competitive manner, indicating that this target molecule and the negative regulator (GAP) bind to overlapping sites on the Cdc42Hs molecule.