Retroviruses induce leukemia in inbred strains of mice by activating cellular proto-oncogenes and/or inactivating tumor suppressors. The proviral integration sites in these leukemias provide powerful genetic tags for disease gene identification. Here we show that Evi24, a common site of retroviral integration in AKXD B cell and BXH-2 myeloid leukemias, contains a novel Dbl family guanine nucleotide exchange factor gene. We have designated this gene Clg (common-site lymphoma/leukemia guanine nucleotide exchange factor). Proviral integrations on chromosome 7 at Evi24 are located 7.6-10.3 kb upstream of Clg and increased Clg expression 2-5-fold compared with leukemias lacking proviral integrations at Evi24. Clg contains Dbl/pleckstrin homology domains with substantial sequence homology to many Rho family activators, including the transforming Dbl and Dbs/Ost oncogenes. Nucleotide exchange assays indicated that Clg specifically activated nucleotide exchange on Cdc42, but not RhoA or Rac1, in vitro. NIH 3T3 transfection studies showed that overexpression of full-length and carboxyl-terminally truncated forms of Clg morphologically transformed NIH 3T3 cells. This study and studies showing that the human homolog of EVI24 is located in a region of 19q13 frequently amplified in B cell lymphomas and pancreatic and breast cancers implicate Clg and Cdc42 activation in mouse and human cancers.