We have found that a complex consisting of a type I PIPK and a DGK associates with the GTPase Rac1. Binding of the lipid kinase complex is through the C-terminus of Rac. Complex formation is augmented in the presence of specific phospholipids. The complex also associates with Rho GDI, through Rac. Based on the role of PtdIns-4,5-P2 in regulating proteins that influence actin structures we propose that the Rac-associated lipid kinase complex functions to generate locally high concentrations of PtdIns-4,5-P2 in a Rac-dependent manner. There are many possible roles PtdIns-4,5-P2 might play. A likely role is binding to barbed-end actin capping proteins. This would release the capping protein, providing free barbed ends for actin polymerization. Uncapping would occur at the membrane so that additional actin polymerization would result in membrane protrusions and lamellapodia, in a Brownian ratchet model. It is also possible that PtdIns-4,5-P2 has other roles, such as promoting the release of G actin from profilin or promoting the cross-linking of actin or its anchorage to the plasma membrane. Studies are currently underway to determine the role of this lipid kinase complex in Rac signaling and actin regulation in vivo.