The Rho GTPase, Cdc42, regulates a wide variety of cellular activities including actin polymerization, focal complex assembly, and kinase signaling. We have identified a new family of very small Cdc42-binding proteins, designated SPECs (for Small Protein Effector of Cdc42), that modulates these regulatory activities. The two human members, SPEC1 and SPEC2, encode proteins of 79 and 84 amino acids, respectively. Both contain a conserved N-terminal region and a centrally located CRIB (Cdc42/Rac Interactive Binding) domain. Using a yeast two-hybrid system, we found that both SPECs interact strongly with Cdc42, weakly with Rac1, and not at all with RhoA. Transfection analysis revealed that SPEC1 inhibited Cdc42-induced c-Jun N-terminal kinase (JNK) activation in COS1 cells in a manner that required an intact CRIB domain. Immunofluorescence experiments in NIH-3T3 fibroblasts demonstrated that both SPEC1 and SPEC2 showed a cortical localization and induced the formation of cell surface membrane blebs, which was not dependent on Cdc42 activity. Cotransfection experiments demonstrated that SPEC1 altered Cdc42-induced cell shape changes both in COS1 cells and in NIH-3T3 fibroblasts and that this alteration required an intact CRIB domain. These results suggest that SPECs act as novel scaffold molecules to coordinate and/or mediate Cdc42 signaling activities.