The Rac GTP-binding proteins regulate the actin cytoskeleton and the superoxide-forming NADPH oxidase of phagocytic leukocytes. These functions of Rac are determined by the GTP/GDP state of the protein, which can be modulated by GTPase-activating proteins (GAPs). The interaction of Ras with both downstream signaling targets and GAPs is mediated via an "effector" domain (amino acids 30-40). We demonstrate that the effector domain of Rac2 is required for both NADPH oxidase activation and actin assembly, but that mutations in this region do not decrease the responsiveness of Rac to GAPs. In contrast, mutations of residues 12 (Gly-->Val) or 61 (Gln-->Leu) inhibit both intrinsic- and GAP-stimulated GTP hydrolysis by Rac2. A double mutation in which both the effector domain and Q61L were modified restored NADPH oxidase activation and membrane ruffling, while the equivalent effector domain and G12V double mutation did not. The Rac2 Q61L mutant had an increased "affinity" for NADPH oxidase activation and for GAP binding as compared to the wild type or G12V proteins. These experiments suggest that Rac contains at least two "effector" interaction sites, and that changes in binding interactions at one of these sites may influence the function of the other.