PtdIns(3, 4, 5)P(3)-dependent Rac exchanger (P-Rex) 1 is a guanine nucleotide exchange factor (GEF) for the small GTPase Rac. P-Rex1 is activated by G protein betagamma subunits (Gbetagamma), and the Gbetagamma-induced activation is inhibited by cAMP-dependent protein kinase A (PKA). However, the details of regulatory mechanism of P-Rex1 remain to be clarified. In the present study, we investigated the mechanism of activation and inhibition of P-Rex1 using various truncated and alanine-substituted mutants and found that the domain-domain interaction of P-Rex1 is important for Gbetagamma-induced activation and PKA-induced inhibition. Immunoprecipitation analysis showed that the second Disheveled/EGL-10/Pleckstrin (DEP) and first PSD-95/Dlg/ZO-1 (PDZ) domains of P-Rex1 associate with the inositol polyphosphate-4-phosphatase (IP4P) domain. Carboxyl-terminal truncation on the IP4P domain or mutations in the protein-binding pocket of the first PDZ domain abolished the association. Analysis of in vitro guanine nucleotide exchange assay, PAK1/2 phosphorylation, and Rac-specific actin reorganization revealed that Gbetagamma could activate a complex of the P-Rex1 mutant lacking the IP4P domain and the isolated IP4P domain as well as full-length P-Rex1. Moreover, PKA phosphorylation prevented the domain-domain interaction and Gbetagamma-binding. These results provide a new insight into the regulation of other Rho-family GEFs and cell responses induced by the heterotrimeric G protein.