Alpha(v)beta8 integrin expression is restricted primarily to kidney, brain, and placenta. Targeted alpha(v) or beta8 deletion is embryonic lethal due to defective placenta and brain angiogenesis, precluding investigation of kidney alpha(v)beta8 function. We find that kidney beta8 is localized to glomerular mesangial cells, and expression is decreased in mouse models of glomerulosclerosis, suggesting that beta8 regulates normal mesangial cell differentiation. To interrogate beta8 signaling pathways, yeast two-hybrid and co-precipitation studies demonstrated beta8 interaction with Rho guanine nucleotide dissociation inhibitor-1 (GDI). Selective beta8 stimulation enhanced beta8-GDI interaction as well as Rac1 (but not RhoA) activation and lamellipodia formation. Mesangial cells from itgb8-/- mice backcrossed to a genetic background that permitted survival, or gdi-/- mice, which develop glomerulosclerosis, demonstrated RhoA (but not Rac1) activity and alpha-smooth muscle actin assembly, which characterizes mesangial cell myofibroblast transformation in renal disease. To determine whether Rac1 directly modulates RhoA-associated myofibroblast differentiation, mesangial cells were transduced with inhibitory Rac peptide fused to human immunodeficiency virus-Tat, resulting in enhanced alpha-smooth muscle actin organization. We conclude that the beta8 cytosolic tail in mesangial cells organizes a signaling complex that culminates in Rac1 activation to mediate wild-type differentiation, whereas decreased beta8 activation shifts mesangial cells toward a RhoA-dependent myofibroblast phenotype.