Rac and Rho GTPases function as critical regulators of actin cytoskeleton remodelling during cell spreading and migration. Here we demonstrate that Rac-mediated reactive oxygen species (ROS) production results in the downregulation of Rho activity. The redox-dependent decrease in Rho activity is required for Rac-induced formation of membrane ruffles and integrin-mediated cell spreading. The pathway linking generation of ROS to downregulation of Rho involves inhibition of the low-molecular-weight protein tyrosine phosphatase (LMW-PTP) and then an increase in the tyrosine phosphorylation and activation of its target, p190Rho-GAP. Our findings define a novel mechanism for the coupling of changes in cellular redox state to the control of actin cytoskeleton rearrangements by Rho GTPases.