The Rho family GTPases are tightly regulated between the active GTP-bound state and the inactive GDP-bound state in a variety of signal transduction processes. Here the Rho family members Cdc42, Rac2, and RhoA were found to form reversible homodimers in both the GTP- and the GDP-bound states. The homophilic interaction of Cdc42 and Rac2, but not RhoA, in the GTP-bound state, caused a significant stimulation of the intrinsic GTPase activity, i.e. the activated form of Cdc42 and Rac2 acts as GTPase-activating proteins toward Cdc42-GTP or Rac2-GTP. The dimerization of the GTPases appeared to be mediated by the carboxyl-terminal polybasic domain, and the specific GTPase-activating effects of Cdc42 and Rac2 were also attributed to the structural determinant(s) in the same region of the molecules. Moreover, similar to the case of Cdc42 and Cdc42GAP interaction, Cdc42-GDP interacted with tetrafluoroaluminate and Cdc42-GTPgammaS (guanosine 5'-3-O-(thio)triphosphate) to form a transition state complex of the GTPase-activating reaction in which the carboxyl-terminal determinant(s) of the GTPgammaS-bound Cdc42 plays a critical role. These results provide a rationale for the fast rate of intrinsic GTP hydrolysis by Cdc42 and Rac and suggest that dimerization may play a role in the negative regulation of specific Rho family GTPases mediated by the carboxyl-terminal polybasic domain.