Adherent cells assemble fibronectin into a fibrillar matrix on their apical surface. The fibril formation is initiated by fibronectin binding to the integrins α5β1 and αvβ3, and is completed by a process that includes fibronectin self-assembly. We found that a 76-amino acid fragment of fibronectin (III1-C) that forms one of the self-assembly sites caused disassembly of preformed fibronectin matrix without affecting cell adhesion. Treating attached fibroblasts or endothelial cells with III1-C inhibited cell migration and proliferation. Rho-dependent stress fiber formation and Rho-dependent focal contact protein phosphorylation were also inhibited, whereas Cdc42 was activated, leading to actin polymerization into filopodia. ACK (activated Cdc42-binding kinase) and p38 MAPK (mitogen-activated protein kinase), two downstream effectors of Cdc42, were activated, whereas PAK (p21-activated kinase) and JNK/SAPK (c-Jun NH2-terminal kinase/stress-activated protein kinase) were inhibited. III1-C treatment also modulated activation of JNK and ERK (extracellular signal-regulated kinases) in response to growth factors, and reduced the activity of the cyclin E-cdk2 complex. These results indicate that the absence of fibronectin matrix causes activation of Cdc42, and that fibronectin matrix is required for Rho activation and cell cycle progression.