Bud emergence in Saccharomyces cerevisiae involves cell cycle-regulated reorganizations of cortical cytoskeletal elements and requires the action of the Rho (Ras homologous)-type GTPase Cdc42. As a first step toward understanding how these cytoskeletal rearrangements are controlled, we have sought to identify those proteins that regulate the binding and hydrolysis of GTP by Cdc42. Here we report that the product of the CDC24 gene, which is required for proper bud-site selection and bud emergence, can stimulate the exchange of GTP for GDP on Cdc42. Combined with previously reported genetic data, this finding suggests that the processes of bud-site selection (which requires the action of a Ras-type GTPase) and bud-site assembly might be coordinated through an activator of a Rho-type GTPase. We also report the identification of a new gene, BEM3, that is a multicopy suppressor of the temperature-sensitive lethality caused by mutations in the bud emergence gene BEM2. Bem3 and Bem2 both contain a Rho GTPase-activating protein homology domain, but only Bem3 is able to stimulate the hydrolysis of GTP on Cdc42. These studies demonstrate that Cdc24 and Bem3 have GDP-release factor activity and GTPase-activating protein activity, respectively, toward the essential bud-site assembly GTPase Cdc42.