Proliferation of epithelial cells must be spatiotemporally regulated to maintain the organization of epithelial sheets. Here we show that the IQGAP family, comprising IQGAP1, 2 and 3, underlies lateral cell-cell contacts of epithelial cells. Of the three proteins, IQGAP3 is unique in that its expression is specifically confined to proliferating cells. Knockdown of IQGAP3 in cultured epithelial cells caused inhibition of proliferation and ERK activity. When exogenously expressed in quiescent cells, IQGAP3 was capable of inducing cell-cycle re-entry, which was completely inhibited by the MEK inhibitor U0126. Thus, IQGAP3 is necessary and sufficient for driving cell proliferation and ERK acts downstream of IQGAP3. Furthermore, IQGAP3 specifically interacted with the active, GTP-bound form of Ras, and in IQGAP3 knockdown cells, the activity of Ras, but not of other small GTPases, was inhibited. Thus, IQGAP3 regulates the promotion of cell proliferation through Ras-dependent ERK activation.