Dimorphic switching from budding to filamentous growth is a characteristic feature of many pathogenic fungi. In the fungal model organism Ustilago maydis polarized growth is induced by the multiallelic b mating type locus and requires the Rho family GTPase Rac1. Here we show that mating type-induced polarized growth involves negative feedback regulation of the Rac1-specific guanine nucleotide exchange factor (GEF) Cdc24. Although Cdc24 is essential for polarized growth, its concentration is drastically diminished during filament formation. Cdc24 is part of a protein complex that also contains the scaffold protein Bem1 and the PAK kinase Cla4. Activation of Rac1 results in Cla4-dependent degradation of the Rac1-GEF Cdc24, thus creating a regulatory negative feedback loop. We generated mutants of Cdc24 that are resistant to Cla4-dependent destruction. Expression of stable Cdc24 variants interfered with filament formation, indicating that negative feedback regulation of Cdc24 is critical for the establishment of polarized growth.