Phospholipase D (PLD) and small GTPases are vital to cell signaling. We report that the Rac2 and the PLD2 isoforms exist in the cell as a lipase-GTPase complex that enables the two proteins to elicit their respective functionalities. A strong association between the two molecules was demonstrated by co-immunoprecipitation and was confirmed in living cells by FRET with CFP-Rac2 and YFP-PLD2 fluorescent chimeras. We have identified the amino acids in PLD2 that define a specific binding site to Rac2. This site is composed of two CRIB (Cdc42-and Racinteractive binding) motifs that we have named "CRIB-1" and "CRIB-2" in and around the PH domain in PLD2. Deletion mutants PLD2-ΔCRIB-1/2 negate co-immunoprecipitation with Rac2 and diminish the FRET signal in living cells. The PLD2-Rac2 association was further confirmed in vitro using affinity-purified recombinant proteins. Binding was saturable with an apparent Kd of 3 nM and was diminished with PLD2-ΔCRIB mutants. Furthermore, PLD2 bound more efficiently to Rac2-GTP than to Rac2-GDP or to a GDP-constitutive Rac2-N17 mutant. Increasing concentrations of recombinant Rac2 in vitro and in vivo during cell adhesion inhibit PLD2. Conversely, Rac2 activity is increased in the presence ofPLD2-WTbut not in PLD2-ΔCRIB. We propose that in activated cells PLD2 affects Rac2 in an initial positive feedback, but as Rac2-GTP accumulates in the cell, this constitutes a "termination signal" leading to PLD2 inactivation.