A polarity complex of PAR-3, PAR-6 and atypical protein kinase C (aPKC) functions in various cell-polarization events, including neuron specification. The small GTPase Cdc42 binds to PAR-6 and regulates cell polarity. However, little is known about the downstream signals of the Cdc42-PAR protein complex. Here, we found that PAR-3 directly interacted with STEF/Tiam1, which are Rac-specific guanine nucleotide-exchange factors, and that STEF formed a complex with PAR-3-aPKC-PAR-6-Cdc42-GTP. Cdc42 induces lamellipodia in a Rac-dependent manner in N1E-115 neuroblastoma cells. Disruption of Cdc42-PAR-6 or PAR-3-STEF binding inhibited Cdc42-induced lamellipodia but not filopodia. The isolated STEF-binding PAR-3 fragment was sufficient to induce lamellipodia independently of Cdc42 and PAR-6. PAR-3 is required for Cdc42-induced Rac activation, but is not essential for lamellipodia formation itself. In cultured hippocampal neurons, STEF accumulated at the tip of the growing axon and colocalized with PAR-3. The spatio-temporal activation and signalling of Cdc42-PAR-6-PAR-3-STEF/Tiam1-Rac seem to be involved in neurite growth and axon specification. We propose that the PAR-6-PAR-3 complex mediates Cdc42-induced Rac activation by means of STEF/Tiam1, and that this process seems to be required for the establishment of neuronal polarity.