Rho-like GTPases control a wide range of cellular functions such as integrin- and cadherin-mediated adhesion, cell motility, and gene expression. The hypervariable C-terminal domain of these GTPases has been implicated in membrane association and effector binding. We found that cell-permeable peptides, encoding the C termini of Rac1, Rac2, RhoA, and Cdc42, interfere with GTPase signaling in a specific fashion in a variety of cellular models. Pull-down assays showed that the C terminus of Rac1 does not associate to either RhoGDI or to Pak. In contrast, the C terminus of Rac1 (but not Rac2 or Cdc42) binds to phosphatidylinositol 4,5-phosphate kinase (PIP5K) via amino acids 185-187 (RKR). Moreover, Rac1 associates to the adapter protein Crk via the N-terminal Src homology 3 (SH3) domain of Crk and the proline-rich stretch in the Rac1 C terminus. These differential interactions mediate Rac1 localization, as well as Rac1 signaling, toward membrane ruffling, cell-cell adhesion, and migration. These data show that the C-terminal, hypervariable domain of Rac1 encodes two distinct binding motifs for signaling proteins and regulates intracellular targeting and differential signaling in a unique and non-redundant fashion.