Nuclear envelope (NE) formation can be studied in a cell-free system made from Xenopus eggs. In this system, NE formation involves the small GTPase Ran. Ran associates with chromatin early in nuclear assembly and concentration of Ran on inert beads is sufficient to induce NE formation. Here, we show that Ran binds to chromatin prior to NE formation and recruits RCC1, the nucleotide exchange factor that generates Ran-GTP. In extracts prepared by high-speed centrifugation, increased concentrations of Ran are sufficient to induce chromatin decondensation and NE assembly. Using field emission in-lens scanning electron microscopy (FEISEM), we show that Ran promotes the formation of smoothed membranes and the assembly of nuclear pore complexes (NPCs). In contrast, RanT24N, a mutant that fails to bind GTP and inhibits RCC1, does not support efficient NE assembly, whereas RanQ69L, a mutant locked in a GTP-bound state, permits some membrane vesicle recruitment to chromatin, but inhibits vesicle fusion and NPC assembly. Thus, binding of Ran to chromatin, followed by local generation of Ran-GTP and GTP hydrolysis by Ran, induces chromatin decondensation, membrane vesicle recruitment, membrane formation and NPC assembly. We propose that the biological activity of Ran is determined by its targeting to structures such as chromatin as well as its guanine nucleotide bound state.