Mesenchymal-epithelial transitions (MET) are crucial for vertebrate organogenesis. The roles of Rho family GTPases in such processes during actual development remain largely unknown. By electroporating genes into chick presomitic mesenchymal cells, we demonstrate that Cdc42 and Rac1 play important and different roles in the MET that generates the vertebrate somites. Presomitic mesenchymal cells, which normally contribute to both the epithelial and mesenchymal populations of the somite, were hyperepithelialized when Cdc42 signaling was blocked. Conversely, cells taking up genes that elevate Cdc42 levels remained mesenchymal. Thus, Cdc42 activity levels appear critical for the binary decision that defines the epithelial and mesenchymal somitic compartments. Proper levels of Rac1 are necessary for somitic epithelialization, since cells with activated or inhibited Rac1 failed to undergo correct epithelialization. Furthermore, Rac1 appears to be required for Paraxis to act as an epithelialization-promoting transcription factor during somitogenesis.