The majority of anaplastic large cell lymphomas (ALCLs) express the nucleophosmin-anaplastic lymphoma kinase (NPM-ALK) fusion protein, which is oncogenic due to its constitutive tyrosine kinase activity. Transformation by NPM-ALK not only increases proliferation, but also modifies cell shape and motility in both lymphoid and fibroblastic cells. We report that the Rac1 GTPase, a known cytoskeletal regulator, is activated by NPM-ALK in ALCL cell lines (Karpas 299 and Cost) and transfected cells (lymphoid Ba/F3 cells, NIH-3T3 fibroblasts). We have identified Vav3 as one of the exchange factors involved in Rac1 activation. Stimulation of Vav3 and Rac1 by NPM-ALK is under the control of Src kinases. It involves formation of a signaling complex between NPM-ALK, pp60(c-src), Lyn and Vav3, in which Vav3 associates with tyrosine 343 of NPM-ALK via its SH2 domain. Moreover, Vav3 is phosphorylated in NPM-ALK positive biopsies from patients suffering from ALCL, demonstrating the pathological relevance of this observation. The use of Vav3-specific shRNA and a dominant negative Rac1 mutant demonstrates the central role of GTPases in NPM-ALK elicited motility and invasion.