The Rac GTPases are currently being subjected to intensive study due to their involvement in a wide array of cellular phenomena. Many studies of Rac function have relied upon the use of relatively uncharacterized Rac dominant active, dominant negative, and effector domain mutants on the basis of the analogy to Ras structure. We have generated and purified such Rac2 mutants and characterized their guanine nucleotide binding properties in vitro. The Rac2 G12V and Q61L activating mutations were shown to hydrolyze bound GTP very slowly and were unresponsive to p190 Rac GTPase-activating protein. Distinct differences in the kinetics of nucleotide binding to individual mutant proteins were observed, accounting for the behavior of these proteins in biological assays. The structural features required for the responsiveness of Rac2 to the guanine nucleotide exchange protein smgGDS were examined. We show that guanine nucleotide exchange by smgGDS is dependent upon intact switch 1 and switch 2 regions in Rac2. Functional interactions between the switch 1 and switch 2 regions and the G12V mutation of Rac2 are described. These data form the basis for rational use of Rac mutants in biological studies.