Extracellular signals regulate actin dynamics through small GTPases of the Rho/Rac/Cdc42 (p21) family. Here we show that p21-activated kinase (Pak1) phosphorylates LIM-kinase at threonine residue 508 within LIM-kinase's activation loop, and increases LIM-kinase-mediated phosphorylation of the actin-regulatory protein cofilin tenfold in vitro. In vivo, activated Rac or Cdc42 increases association of Pak1 with LIM-kinase; this association requires structural determinants in both the amino-terminal regulatory and the carboxy-terminal catalytic domains of Pak1. A catalytically inactive LIM-kinase interferes with Rac-, Cdc42- and Pak1-dependent cytoskeletal changes. A Pak1-specific inhibitor, corresponding to the Pak1 autoinhibitory domain, blocks LIM-kinase-induced cytoskeletal changes. Activated GTPases can thus regulate actin depolymerization through Pak1 and LIM-kinase.