Cell–cell adhesion is a dynamic process in various cellular and developmental situations. Cadherins, well-known Ca2+-dependent adhesion molecules, are thought to play a major role in the regulation of cell–cell adhesion. However, the molecular mechanism underlying the rearrangement of cadherin-mediated cell–cell adhesion is largely unknown. Cdc42 and Rac1, belonging to the Rho small GTPase family, have recently been shown to be involved in the regulation of cell–cell adhesion. In addition, IQGAP1, an effector for Cdc42 and Rac1, has been shown to regulate the cadherin function through interaction with ß-catenin, a molecule associated with cadherin. In this review, we will summarize the mode of action of Cdc42 and Rac1 as well as IQGAP1 as molecular switches for the cadherin function, and then discuss physiological processes in which the Cdc42/Rac1/IQGAP1 system may be involved.© 1999 Academic Press