PAKs are serine/threonine protein kinases that are activated by binding to Rac or Cdc42hs. Different forms of activated PAK1 have been reported to either promote membrane ruffling and focal adhesion assembly or cause focal adhesion disassembly and stress fiber dissolution. To understand the basis for these distinct morphological effects, we have examined the mechanism of mutational activation of PAK1, and characterized the effects of different active PAK1 proteins on cytoskeletal structure in vivo. We find that PAK1 contains an autoinhibitory domain that overlaps with its small G protein binding domain and that two separate activating mutations within this regulatory region each decrease autoinhibitory activity. Because only one of these mutations affects Cdc42hs binding activity, this indicates that activation of PAK1 by these mutations results from interference with the function of the autoinhibitory domain and not with small G protein binding activity. When we examined the morphological effects of these different forms of PAK1 in vivo, we found that PAK1 kinase activity was associated with disassembly of focal adhesions and actin stress fibers and that this may require interaction with potential SH3 domain-containing proteins. Lamellipodia formation and membrane ruffling caused by active PAK1 expression, however, was independent of PAK1 catalytic activity and likely requires interaction among multiple proteins binding to the PAK1 regulatory domain.