The p21-activated kinase (PAK) is a downstream target of Rac and CDC42, members of the Ras-related Rho subfamily, that mediates signaling pathway leading to cytoskeletal reorganization. To investigate its function in Caenorhabditis elegans development, we have isolated the cDNA coding for the p21-activated kinase homologue (CePAK) from a C. elegans embryonic cDNA library. This 2.35-kilobase pair cDNA encodes a polypeptide of 572 amino acid residues, with the highly conserved N-terminal p21-binding and the C-terminal kinase domains. Similar to its mammalian and Drosophila counterparts, the CePAK protein expressed in E. coli exhibits binding activity toward GTP-bound CeRac1 and CDC42Ce. Polyclonal antibodies raised against the recombinant CePAK recognize a specific 70-kDa protein from embryonic extracts that displays CeRac1/CDC42Ce-binding and kinase activities. Immunofluorescence analysis indicates that CePAK is specifically expressed at the hypodermal cell boundaries during embryonic body elongation, which involves dramatic cytoskeletal reorganization. Interestingly, CeRac1 and CDC42Ce are found at the same location, which might point to their common involvement in hypodermal cell fusion, a crucial morphogenetic event for nematode development.