The Cdc42p GTPase regulates multiple signal transduction pathways through its interactions with downstream effectors. Specific functional domains within Cdc42p are required for guanine-nucleotide binding, interactions with downstream effectors, and membrane localization. However, little is known about how Cdc42p is clustered at polarized growth sites or is extracted from membranes by Rho guanine-nucleotide dissociation inhibitors (RhoGDIs) at specific times in the cell cycle. To address these points, localization studies were performed in Saccharomyces cerevisiae using green fluorescent protein (GFP)-tagged Cdc42p and the RhoGDI Rdi1p. GFP-Rdi1p localized to polarized growth sites at specific times of the cell cycle but not to other sites of Cdc42p localization. Overexpression of Rdi1p led to loss of GFP-Cdc42p from internal and plasma membranes. This effect was mediated through the Cdc42p Rho-insert domain, which was also implicated in interactions with the Bni1p scaffold protein. These data suggested that Rdi1p functions in cell cycle-specific Cdc42p membrane detachment. Additional genetic and time-lapse microscopy analyses implicated nucleotide binding in the clustering of Cdc42p. Taken together, these results provide insight into the complicated nature of the relationships between Cdc42p localization, nucleotide binding, and protein-protein interactions.