Colony-stimulating factor-1 (CSF-1) induces osteoclast spreading that requires activation of c-Src and phosphatidyl inositol 3-kinase (PI3-K), both of which are recruited to activated c-Fms, the CSF-1 receptor. The present report provides evidence that the hemopoietic guanine nucleotide exchange factor (GEF), Vav, and its target GTPase, Rac, lie downstream from this initial signaling complex. CSF-1 treatment of osteoclast-like cells induced translocation of Vav to the plasma membrane, an increase in its phosphotyrosine content, and a concomitant decline in the amount of phosphoinositol 4,5-bisphosphate bound to Vav, changes known to induce Vav's GEF activity. CSF-1 induced the association of Vav and Rac and increased Rac's GTPase activity. CSF-1 also induced rapid translocation of Rac to the periphery of spreading neonatal rat osteoclasts where it co-localized primarily with Vav3 and to a lesser extent with Vav1. Wortmannin, an inhibitor of PI3-K, blocked CSF-1-induced Rac translocation and prevented CSF-1-induced spreading and actin reorganization in osteoclasts. CSF-1-induced osteoclast spreading was not significantly reduced in osteoclasts isolated from Vav1 knock-out mice and Vav1 knock-out mice had normal bone density. Microinjection of constitutively active Rac, but not constitutively active Cdc42 or RhoA, induced lamellipodia formation and osteoclast spreading, mimicking the effects of CSF-1. Dominant-negative Rac blocked CSF-1-induced osteoclast spreading, whereas neither dominant-negative Cdc42 nor C3, an inhibitor of RhoA, affected the response to CSF-1. These data demonstrate that Vav and Rac lie downstream from activated PI3-K in CSF-1-treated osteoclasts and that Rac is required for CSF-1-induced cytoskeletal remodeling in these cells.