Rac is a member of the Rho family of small GTPases and acts as a molecular switch. When GTP-bound, Rac binds specific effectors to induce downstream signaling events, including actin cytoskeletal rearrangements (Hall, Science 1998;279:509-514). Herein we review the recent evidence suggesting that Rac is involved in the morphogenesis of dendritic spines (Luo et al., Nature 1996;379:837-840; Nakayama et al., J Neurosci 2000; 20:5329-5338). In addition, we discuss how Rac activity is regulated by guanine nucleotide exchange factors, which may be further regulated by extracellular factors. Thus, the Rac signal transduction pathway may provide links between extracellular ligands or synaptic activity and the regulation of the actin cytoskeleton in spine morphogenesis.