Cdc42, Rac1 and other Rho-type GTPases regulate gene expression, cell proliferation and cytoskeletal architecture. A challenge is to identify the effectors of Cdc42 and Rac1 that mediate these biological responses. Protein kinases of the p21-activated kinase (PAK) family bind activated Rac1 and Cdc42, and switch on mitogen-activated protein (MAP) kinase pathways; however, their roles in regulating actin cytoskeleton organization have not been clearly established. Here, we show that mutants of the budding yeast Saccharomyces cerevisiae lacking the PAK homologs Ste20 and Cla4 exhibit actin cytoskeletal defects, in vivo and in vitro, that resemble those of cdc42-1 routants. Moreover, STE20 overexpression suppresses cdc42-1 growth defects and cytoskeletal defects in vivo, and Ste20 kinase corrects the actin-assembly defects of permeabilized cdc42-1 cells in vitro. Thus, PAKs are effectors of Cdc42 in pathways that regulate the organization of the cortical actin cytoskeleton.