BACKGROUND: Vascular endothelial growth factor/vascular permeability factor (VEGF/VPF) induces both angiogenesis and vascular permeability. Although its angiogenic activity has been well characterized, the signaling pathways of VEGF-induced permeability remain poorly understood. METHODS AND RESULTS: Using the mouse corneal micropocket assay, Miles assay, and a combination of cytochemical, electron microscopic, and biochemical assays, we demonstrate that VEGF-induced vascular leakage partly can be separated from its angiogenic activity. VEGF but not FGF-2 induced capillaries with a highly fenestrated endothelium, a feature linked with increased vascular permeability. A cell-permeable Rac antagonist (TAT-RacN17) converted VEGF-induced, leaky vascular plexuses into well-defined vascular networks. In addition, this Rac mutant blocked formation of VEGF-induced endothelial fenestrations and vascular permeability but only partially inhibited angiogenesis. Studies on endothelial cell cultures further revealed that VEGF stimulated phosphorylation of VEGF receptor-2 (VEGFR-2), leading to activation of Rac as well as increased phosphorylation of phospholipase Cgamma (PLCgamma), protein kinase B (Akt), endothelial nitric oxide synthase (eNOS), and extracellular regulated kinase (Erk1/2). We further found that phosphatidylinositol-3-OH kinase (PI3K) acted upstream of Rac and Akt-eNOS in VEGF/VEGFR-2 signaling. CONCLUSIONS: Our findings indicate that the small GTP-binding protein Rac is a key component in mediation of VEGF-induced vascular permeability but less so in neovascularization. This may have conceptual implications for applying Rac antagonists in treatment and prevention of VEGF-induced vascular leakage and edema in connection with ischemic disorders.