We have isolated a novel member of the mammalian PAK (p21 activated kinase) and yeast Ste20 serine/threonine kinase family from a mouse fibroblast cDNA library, designated mPAK-3. Expression of mPAK-3 in Saccharomyces cerevisiae partially restores mating function in ste20 null cells. Like other PAKs, mPAK-3 contains a putative Cdc42Hs/Rac binding sequence and when transiently expressed in COS cells, full-length mPAK-3 binds activated (GTP gamma S (guanosine 5'-3-O-(thio-triphosphate)-bound) glutathione S-transferase (GST)-Cdc42Hs and GST-Rac1 but not GST-RhoA. As expected for a putative target molecule, mPAK-3 does not bind to an effector domain mutant of Cdc42Hs. Furthermore, activated His-tagged Cdc42Hs and His-tagged Rac stimulate mPAK-3 autophosphorylation and phosphorylation of myelin basic protein by mPAK-3 in vitro. Interestingly, the amino-terminal region of mPAK-3 contains potential SH3-binding sites and we find that mPAK-3, expressed in vitro and in vivo, shows highly specific binding to the SH3 domain of phospholipase C-gamma and at least one SH3 domain in the adapter protein Nck. These results raise the possibility of an additional level of regulation of the PAK family in vivo.