Activation of the NADPH oxidase of phagocytes involves the small GTP-binding protein p21rac. In this paper we report that neutrophil cytosol contains predominantly p21rac2 rather than p21rac1, and that the P21rac2 is almost entirely complexed with rhoGDI (GDP dissociation inhibitor) to form a heterodimer with a molecular mass of 45-50 kDa. Activation of superoxide production by phorbol 12-myristate 13-acetate or formylmethionyl-leucyl-phenylalanine in whole cells, and by SDS in the cell-free assay, led to the dissociation of some of the p21rac2 from rhoGDI and its movement to the plasma membrane together with p47phox and p67phox. The appearance of these proteins at the plasma membrane was related to the dose of the agonist and to the rate of superoxide generation. The nucleotide bound to p21rac2 in this complex following isolation was almost exclusively GDP, with less than 2% GTP, and the complex was active in the cell-free assay. Although the rac/GDI complex could activate the NADPH oxidase in the absence of exogenous GTP, the rate of superoxide production was increased 3-fold by the addition of GTP and was almost completely inhibited by GDP. Our findings confirm that rhoGDI serves as GDP dissociation inhibitor and that the release of p21rac2 from this inhibitor is an important step in activation of the NADPH oxidase.