Rho family GTPases are critical for normal B cell development and function, and their activity is regulated by a large and complex network of guanine nucleotide exchange factors (GEFs) and GTPase-activating proteins (GAPs). However, the role of GAPs in B cell development is poorly understood. In this study, we show that the novel Rac-GAP ARHGAP25 is important for B cell development in mice in a CXCR4-dependent manner. We show that Arhgap25 deficiency in mice leads to a significant decrease in peripheral blood B cell numbers as well as defects in mature B cell differentiation. Arhgap25-/- B cells respond to Ag stimulation in vitro and in vivo but have impaired germinal center formation and decreased IgG1 class switching. Additionally, Arhgap25-/- B cells show evidence of increased baseline motility and augmented chemotaxis to CXCL12. Taken together, these studies demonstrate an important role for Arhgap25 in peripheral B cell development and Ag response.