Pak1, a serine/threonine kinase that regulates the actin cytoskeleton, is an effector of the Rho family GTPases Cdc42 and Rac1. The crystal structure of Pak1 revealed an autoinhibited dimer that must dissociate upon GTPase binding. We show that Pak1 forms homodimers in vivo and that its dimerization is regulated by the intracellular level of GTP-Cdc42 or GTP-Rac1. The dimerized Pak1 adopts a trans-inhibited conformation: the N-terminal inhibitory portion of one Pak1 molecule in the dimer binds and inhibits the catalytic domain of the other. One GTPase interaction can result in activation of both partners. Another ligand, βPIX, can stably associate with dimerized Pak1. Dimerization does not facilitate Pak1 trans-phosphorylation. We conclude that the functional significance of dimerization is to allow trans-inhibition.