Rho family GTPases are GDP/GTP-regulated molecular switches that regulate signaling pathways controlling diverse cellular processes. Wrch-1 was identified as a Wnt-1 regulated Cdc42 homolog, upregulated by Wnt1 signaling in Wnt1-transformed mouse mammary cells, and was able to promote formation of filopodia and activate the PAK serine/threonine kinase. Wrch-1 shares significant sequence and functional similarity with the Cdc42 small GTPase. However, Wrch-1 possesses a unique N-terminal 46 amino acid sequence extension that contains putative Src homology 3 (SH3) domain-interacting motifs. We determined the contribution of the N terminus to Wrch-1 regulation and activity. We observed that Wrch-1 possesses properties that distinguish it from Cdc42 and other Rho family GTPases. Unlike Cdc42, Wrch-1 possesses an extremely rapid, intrinsic guanine nucleotide exchange activity. Although the N terminus did not influence GTPase or GDP/GTP cycling activity in vitro, N-terminal truncation of Wrch-1 enhanced its ability to interact with and activate PAK and to cause growth transformation. The N terminus associated with the Grb2 SH3 domain-containing adaptor protein, and this association increased the levels of active Wrch-1 in cells. We propose that Grb2 overcomes N-terminal negative regulation to promote Wrch-1 effector interaction. Thus, Wrch-1 exhibits an atypical model of regulation not seen in other Rho family GTPases.