The control of cell adhesion is an important mechanism by which Eph receptors regulate cell sorting during development. Activation of EphA4 in Xenopus blastulae induces a reversible, cell autonomous loss-of-adhesion and disruption of the blastocoel roof. We show this phenotype is rescued by Nckbeta (Grb4) dependent on its interaction with EphA4. Xenopus p21(Cdc42/Rac)-activated kinase xPAK1 interacts with Nck, is activated in embryo by EphA4 in an Nck-dependent manner, and is required for EphA4-induced loss-of-adhesion. Ectopic expression of xPAK1 phenocopies EphA4 activation. This does not require the catalytic activity of xPAK1, but it does require its GTPase binding domain and is enhanced by membrane targeting. Indeed, membrane targeting of the GTPase binding domain (GBD) of xPAK1 alone is sufficient to phenocopy EphA4 loss-of-adhesion. Both EphA4 and the xPAK1-GBD down-regulate RhoA-GTP levels, and consistent with this, loss-of-adhesion can be rescued by activated Cdc42, Rac, and RhoA and can be epistatically induced by dominant-negative RhoA. Despite this, neither Cdc42 nor Rac activities are down-regulated by EphA4 activation or by the xPAK1-GBD. Together, the data suggest that EphA4 activation sequesters active Cdc42 and in this way down-regulates cell-cell adhesion. This novel signaling pathway suggests a mechanism for EphA4-guided migration.