The serine/threonine kinase p21‐activated kinase (PAK) has been implicated as a downstream effector of the small GTPases Rac and Cdc42. While these GTPases evidently induce a variety of morphological changes, the role (s) of PAK remains elusive. Here we report that overexpression of βPAK in PC12 cells induces a Rac phenotype, including cell spreading/membrane ruffling, and increased lamellipodia formation at growth cones and shafts of nerve growth factor‐induced neurites. These effects are still observed in cells expressing kinase‐negative or Rac/Cdc42 binding‐deficient PAK mutants, indicating that kinase‐and p21‐binding domains are not involved. Furthermore, lamellipodia formation in all cell lines, including those expressing Rac binding‐deficient PAK, is inhibited significantly by dominant‐negative RacN17. Equal inhibition is achieved by blocking PAK interaction with the guanine nucleotide exchange factor PIX using a specific N‐terminal PAK fragment. We conclude that PAK, via its N‐terminal non‐catalytic domain, acts upstream of Rac mediating lamellipodia formation through interaction with PIX.