The proper function of Rho GTPases requires precise spatial and temporal regulation of effector interactions. Integrin-mediated cell adhesion modulates the interaction of GTP-Rac with its effectors by controlling GTP-Rac membrane targeting. Here, we show that the translocation of GTP-Rac to membranes is independent of effector interactions, but instead requires the polybasic sequence near the carboxyl terminus. Cdc42 also requires integrin-mediated adhesion for translocation to membranes. A recently developed fluorescence resonance energy transfer (FRET)-based assay yields the surprising result that, despite its uniform distribution, the interaction of activated V12-Rac with a soluble, cytoplasmic effector domain is enhanced at specific regions near cell edges and is induced locally by integrin stimulation. This enhancement requires Rac membrane targeting. We show that Rho-GDI, which associates with cytoplasmic GTP-Rac, blocks effector binding. Release of Rho-GDI after membrane translocation allows Rac to bind to effectors. Thus, Rho-GDI confers spatially restricted regulation of Rac-effector interactions.