A Caenorhabditis elegans cDNA encoding a homologue of the p21 ras-related CDC42, designated as CDC42Ce, was isolated from a nematode mixed stage cDNA library. The encoded protein of 188 amino acid residues has 85% identity to both human G25K and CDC42Hs and 79 and 76% identity to the yeast CDC42Sp and CDC42Sc proteins, respectively. The CDC42Ce cDNA maps to a position on C. elegans chromosome II in close proximity to lin-26, a cell lineage gene. The CDC42Ce cDNA hybridizes to 2- and 1.5-kilobase mRNAs. Their expression is developmentally regulated with highest levels at the embryonic stage, decreasing progressively during development except for an increase of the more abundant 1.5-kilobase mRNA at the L3 stage. The glutathione S-transferase/CDC42Ce fusion protein expressed in Escherichia coli displays both GTP binding and intrinsic GTPase activities. The GTPase activity of CDC42Ce is moderately stimulated by human n-chimaerin, a GTPase-activating protein for the related p21 rac1. The CDC42Ce protein complements the temperature-sensitive lethal mutation cdc42-1 in yeast Saccharomyces cerevisiae. These data suggest that CDC42Ce is the C. elegans homologue of the yeast CDC42. The developmental expression pattern of mRNA and is biochemical properties of its encoded protein which are closely related to CErac1 suggest that the two p21s might be involved in related biological processes.