The T332I mutation in Rho guanine nucleotide exchange factor 10 (ARHGEF10) was previously found in persons with slowed nerve conduction velocities and thin myelination of peripheral nerves. However, the molecular and cellular basis of the T332I mutant is not understood. Here, we show that ARHGEF10 has a negative regulatory region in the N terminus, in which residue 332 is located, and the T332I mutant is constitutively active. An N-terminal truncated ARHGEF10 mutant, ARHGEF10 ΔN (lacking amino acids 1-332), induced cell contraction that was inhibited by a Rho kinase inhibitor Y27632 and had higher GEF activity for RhoA than the wild type. The T332I mutant also showed the phenotype similar to the N-terminal truncated mutant. These data suggest that the ARHGEF10 T332I mutation-associated phenotype observed in the peripheral nerves is due to activated GEF activity of the ARHGEF10 T332I mutant.