Intersectin 1L is a scaffolding protein involved in endocytosis that also has guanine nucleotide exchange activity for Cdc42. In the context of the full-length protein, the catalytic exchange activity of the DH domain is repressed. Here we use biochemical methods to dissect the mechanism for this inhibition. We demonstrate that the intersectin 1L SH3 domains, which bind endocytic proteins, directly inhibit the activity of the DH domain in assays for both binding and exchange of Cdc42. This inhibitory mechanism seems to act through steric hindrance of Cdc42 binding by an intramolecular interaction between the intersectin 1L SH3 domain region and the adjacent DH domain. Surprisingly, the mode of SH3 domain binding is other than through the proline peptide binding pocket. The dual role of the SH3 domains in endocytosis and repression of exchange activity suggests that the intersectin 1L exchange activity is regulated by endocytosis. We show that the endocytic protein, dynamin, competes for binding to the SH3 domains with the neural Wiskott-Aldrich Syndrome protein, an actin filament nucleation protein that is a substrate for activated Cdc42. Swapping of SH3 domain binding partners might act as a switch controlling the actin nucleation activity of intersectin 1L.