The p21-activated protein kinases (PAKs) are activated through direct interaction with the GTPases Rac and Cdc42Hs, which are implicated in the control of the mitogen-activated protein kinase (MAP kinase) c-Jun N-terminal kinase (JNK) and the reorganization of the actin cytoskeleton [1-3]. The exact role of the PAK proteins in these signaling pathways is not entirely clear. To elucidate the biological function of Pak2 and to identify its molecular targets, we used a novel two-hybrid system, the Ras recruitment system (RRS), that aims to detect protein-protein interactions at the inner surface of the plasma membrane (described in the accompanying paper by Broder et al. [4]). The Pak2 regulatory domain (PakR) was fused at the carboxyl terminus of a RasL61 mutant protein and screened against a myristoylated rat pituitary cDNA library. Four clones were identified that interact specifically with PakR and three were subsequently shown to encode a previously unknown homologue of the GTPase Cdc42Hs. This approximately 36 kDa protein, designated Chp, exhibits an overall sequence identity to Cdc42Hs of approximately 52%. Chp contains two additional sequences at the amino and carboxyl termini that are not found in any known GTPase. The amino terminus contains a polyproline sequence, typically found in Src homology 3 (SH3)-binding domains, and the carboxyl terminus appears to be important for Pak2 binding. Results from the microinjection of Chp into cells implicated Chp in the induction of lamellipodia and showed that Chp activates the JNK MAP kinase cascade.