The Rac1 guanine nucleotide exchange factor, Vav, is activated in hematopoietic cells in response to a large variety of stimuli. The downstream signaling events derived from Vav have been primarily characterized as leading to transcription or transformation. However, we report here that Vav and Rac1 in natural killer (NK) cells regulate the development of cell-mediated killing. There is a rapid increase in Vav tyrosine phosphorylation during the development of antibody-dependent cellular cytotoxicity and natural killing. In addition, overexpression of Vav, but not of a mutant lacking exchange factor activity, enhances both forms of killing by NK cells. Furthermore, dominant-negative Rac1 inhibits the development of NK cell-mediated cytotoxicity by two mechanisms: (a) conjugate formation between NK cells and target cells is decreased; and (b) those NK cells that do form conjugates have decreased ability to polarize their granules toward the target cell. Therefore, our results suggest that in addition to participating in the regulation of transcription, Vav and Rac1 are pivotal regulators of adhesion, granule exocytosis, and cellular cytotoxicity.