THE superfamily of low molecular mass GTP-binding proteins, for which the ras proteins are prototypes, has been implicated in the regulation of diverse biological activities including protein trafficking, secretion, and cell growth and differentiation. One member of this family, CDC42Hs (originally referred to as Gp or G25K), seems to be the human homologue of the Saccharomyces cerevisiae cell-division-cycle protein, CDC42Sc. A second S. cerevisiae protein, CDC24, which is known from complementation studies to act with CDC42Sc to regulate the development of normal cell shape and the selection of nonrandom budding sites in yeast, contains a region with sequence similarity to the dbl oncogene product. Here we show that dbl specifically catalyses the dissociation of GDP from CDC42Hs and thereby qualifies as a highly selective guanine nucleotide exchange factor for the GTP-binding protein. Although guanine nucleotide exchange activities have been previously described for other members of the Ras-related GTP-binding protein family, this is the first demonstration, to our knowledge, of the involvement of a human oncogenic protein in catalysing exchange activity.