Dbs is a Rho-specific guanine nucleotide exchange factor that was identified in a screen for proteins whose expression causes deregulated growth in NIH 3T3 mouse fibroblasts. Although Rac1 has not been shown to be a substrate for Dbs in either in vitro or in vivo assays, the Rat ortholog of Dbs (Ost) has been shown to bind specifically to GTP.Rac1 in vitro. The dependence of the Rac1/Dbs interaction on GTP suggests that Dbs may in fact be an effector for Rac1. Here we show that the interaction between activated Rac1 and Dbs can be recapitulated in mammalian cells and that the Rac1 docking site resides within the pleckstrin homology domain of Dbs. This interaction is specific for Rac1 and is not observed between Rac1 and several other members of the Rho-specific guanine nucleotide exchange factor family. Co-expression of Dbs with activated Rac1 causes enhanced focus forming activity and elevated levels of GTP.RhoA in NIH 3T3 cells, indicating that Dbs is activated by the interaction. Consistent with this, activated Rac1 co-localizes with Dbs in NIH 3T3 cells, and natively expressed Rac1 relocalizes in response to Dbs expression. To summarize, we have characterized a surprisingly direct pleckstrin homology domain-mediated mechanism through which Rho GTPases can become functionally linked.