Shear stress, the tangential component of hemodynamic forces, plays an important role in endothelial remodeling. In this study, we investigated the role of Rho family GTPases Cdc42 and Rho in shear stress–induced signal transduction and cytoskeleton reorganization. Our results showed that shear stress induced the translocation of Cdc42 and Rho from cytosol to membrane. Although both Cdc42 and Rho were involved in the shear stress–induced transcription factor AP-1 acting on the 12-O-tetradecanoyl-13-phorbol-acetate–responsive element (TRE), only Cdc42 was sufficient to activate AP-1/TRE. Dominant-negative mutants of Cdc42 and Rho, as well as recombinant C3 exoenzyme, attenuated the shear stress activation of c-Jun NH₂-terminal kinases (JNKs), suggesting that Cdc42 and Rho regulate the shear stress induction of AP-1/TRE activity through JNKs. Shear stress–induced cell alignment and stress fiber formation were inhibited by the dominant-negative mutants of Rho and p160ROCK, but not by the dominant-negative mutant of Cdc42, indicating that the Rho-p160ROCK pathway regulates the cytoskeletal reorganization in response to shear stress.