Tiam1 (T-lymphoma invasion and metastasis 1) is one of the known guanine nucleotide (GDP/GTP) exchange factors (GEFs) for Rho GTPases (e.g., Rac1) and is expressed in breast tumor cells (e.g., SP-1 cell line). Immunoprecipitation and immunoblot analyses indicate that Tiam1 and the cytoskeletal protein, ankyrin, are physically associated as a complex in vivo. In particular, the ankyrin repeat domain (ARD) of ankyrin is responsible for Tiam1 binding. Biochemical studies and deletion mutation analyses indicate that the 11-amino acid sequence between amino acids 717 and 727 of Tiam1 ((717)GEGTDAVKRS(727)L) is the ankyrin-binding domain. Most importantly, ankyrin binding to Tiam1 activates GDP/GTP exchange on Rho GTPases (e.g., Rac1). Using an Escherichia coli-derived calmodulin-binding peptide (CBP)-tagged recombinant Tiam1 (amino acids 393-728) fragment that contains the ankyrin-binding domain, we have detected a specific binding interaction between the Tiam1 (amino acids 393-738) fragment and ankyrin in vitro. This Tiam1 fragment also acts as a potent competitive inhibitor for Tiam1 binding to ankyrin. Transfection of SP-1 cell with Tiam1 cDNAs stimulates all of the following: (1) Tiam1-ankyrin association in the membrane projection; (2) Rac1 activation; and (3) breast tumor cell invasion and migration. Cotransfection of SP1 cells with green fluorescent protein (GFP)-tagged Tiam1 fragment cDNA and Tiam1 cDNA effectively blocks Tiam1-ankyrin colocalization in the cell membrane, and inhibits GDP/GTP exchange on Rac1 by ankyrin-associated Tiam1 and tumor-specific phenotypes. These findings suggest that ankyrin-Tiam1 interaction plays a pivotal role in regulating Rac1 signaling and cytoskeleton function required for oncogenic signaling and metastatic breast tumor cell progression.