The small GTP-binding proteins of the Rho family, consisting of the Rho, Rac, and Cdc42 subfamilies, are implicated in various cell functions, such as cell shape change, cell motility and cytokinesis, through reorganization of actin cytoskeleton. Rho GDI is a general regulator which forms a complex with the GDP-bound inactive form of the Rho family members and inhibits their activation. We have purified Rho GDI from the yeast Saccharomyces cerevisiae, cloned its gene, and named it RDII (Rho GD). In this study, we have further characterized yeast Rho GDI. Rho GDI was found in the cytosol by immunoblot and immunofluorescence microscopic analyses. Rho1p and Cdc42p were co-immunoprecipitated with Rho GDI from the cytosol. This immunoprecipitated Rho1p was mainly bound to GDP. In the disruption mutant of Rho GDI, which did not show any apparent phenotype, both Rho1p and Cdc42p were also present in the cytosol. These results indicate that yeast Rho GDI possesses properties similar to those of mammalian Rho GDI, and that there is a cytosolic factor which functionally substitutes for Rho GDI in yeast.