Lysophosphatidic acid (LPA) is a serum-borne phospholipid that activates its own G protein-coupled receptors present in numerous cell types. In addition to stimulating cell proliferation, LPA also induces cytoskeletal changes and promotes cell migration in a RhoA- and Rac-dependent manner. Whereas RhoA is activated via Galpha(12/13)-linked Rho-specific guanine nucleotide exchange factors, it is unknown how LPA receptors may signal to Rac. Here we report that the prototypic LPA(1) receptor (previously named Edg2), when expressed in B103 neuroblastoma cells, mediates transient activation of RhoA and robust, prolonged activation of Rac leading to cell spreading, lamellipodia formation, and stimulation of cell migration. LPA-induced Rac activation is inhibited by pertussis toxin and requires phosphoinositide 3-kinase activity. Strikingly, LPA fails to activate Rac in cell types that lack the Rac-specific exchange factor Tiam1; however, enforced expression of Tiam1 restores LPA-induced Rac activation in those cells. Tiam1-deficient cells show enhanced RhoA activation, stress fiber formation, and cell rounding in response to LPA, consistent with Tiam1/Rac counteracting RhoA. We conclude that LPA(1) receptors couple to a G(i)-phosphoinositide 3-kinase-Tiam1 pathway to activate Rac, with consequent suppression of RhoA activity, and thereby stimulate cell spreading and motility.