Members of the Rho GTPase family regulate the organization of the actin cytoskeleton in response to extracellular growth factors. We have identified three proteins that form a distinct branch of the Rho family: Rnd1, expressed mostly in brain and liver; Rnd2, highly expressed in testis; and Rnd3/RhoE, showing a ubiquitous low expression. At the subcellular level, Rnd1 is concentrated at adherens junctions both in confluent fibroblasts and in epithelial cells. Rnd1 has a low affinity for GDP and spontaneously exchanges nucleotide rapidly in a physiological buffer. Furthermore, Rnd1 lacks intrinsic GTPase activity suggesting that in vivo, it might be constitutively in a GTP-bound form. Expression of Rnd1 or Rnd3/RhoE in fibroblasts inhibits the formation of actin stress fibers, membrane ruffles, and integrin-based focal adhesions and induces loss of cell-substrate adhesion leading to cell rounding (hence Rnd for "round"). We suggest that these proteins control rearrangements of the actin cytoskeleton and changes in cell adhesion.