We have established a cell-free system to investigate pathways that regulate actin polymerization. Addition of GTP gamma S to lysates of polymorphonuclear leukocytes (PMNs) or Dictyostelium discoideum amoeba induced formation of filamentous actin, The GTP gamma S appeared to act via a small G-protein, since it was active in lysates of D. discoideum mutants missing either the alpha(2)- or beta-subunit of the heterotrimeric G-protein required for chemoattractant-induced actin polymerization in living cells. Furthermore, recombinant Cdc42, but not Rho or Rac, induced polymerization in the cell-free system. The Cdc42-induced increase in filamentous actin required GTP gamma S binding and was inhibited by a fragment of the enzyme PAK1 that hinds Cdc42. In a high speed supernatant, GTP gamma S alone was ineffective, but GTP gamma S-loaded Cdc42 induced actin polymerization, suggesting that the response was limited by guanine nucleotide exchange. Stimulating exchange by chelating magnesium, by adding acidic phospholipids, or by adding the exchange factors Cdc24 or Dbl restored the ability of GTP gamma S to induce polymerization, The stimulation of actin polymerization did not correlate with PIP2 synthesis.