Ral is a ubiquitously expressed Ras-like small GTPase. Several guanine nucleotide exchange factors for Ral have been identified, including members of the RalGDS family, which exhibit a Ras binding domain and are regulated by binding to RasGTP. Here we describe a novel type of RalGEF, RalGEF2. This guanine nucleotide exchange factor has a characteristic Cdc25-like catalytic domain at the N terminus and a pleckstrin homology (PH) domain at the C terminus. RalGEF2 is able to activate Ral both in vivo and in vitro. Deletion of the PH domain results in an increased cytoplasmic localization of the protein and a corresponding reduction in activity in vivo, suggesting that the PH domain functions as a membrane anchor necessary for optimal activity in vivo.