Recent studies in Cdc42 knockout mouse embryonic stem (ES) cells and ES-derived fibroblastoid cell lines raise concern on a body of literature derived by dominant mutant expression approach in a variety of cell lines implicating mammalian Cdc42 as a key regulator of filopodia induction, directional migration and cell cycle progression. To resolve the physiological function of mammalian Cdc42, we have characterized the Cdc42^−/− and Cdc42GAP^−/− primary mouse embryonic fibroblasts (MEFs) produced by gene targeting as the Cdc42 loss- or gain-of-activity cell model. The Cdc42^−/− cells were defective in filopodia formation stimulated by bradykinin and in dorsal membrane ruffling stimulated by PDGF, whereas the Cdc42GAP^−/− cells displayed spontaneous filopodia. The Cdc42 loss- or gain-of-activity cells were defective in adhesion to fibronectin, wound-healing, polarity establishment, and migration toward a serum gradient. These defects were associated with deficiencies of PAK1, GSK3β, myosin light chain, and FAK phosphorylation. Furthermore, Cdc42^−/− cells were defective in G1/S-phase transition and survival, correlating with deficient NF-κB transcription and defective JNK, p70 S6K, and ERK1/2 activation. These results demonstrate a different requirement of Cdc42 activity in primary MEFs from ES or ES-derived clonal fibroblastoid cells and suggest that Cdc42 plays cell-type–specific signaling roles.