Angiopoietin-1 (Ang-1), a ligand of the endothelium-specific receptor Tie-2, inhibits permeability in the mature vasculature, but the mechanism remains unknown. Here we show that Ang-1 signals Rho family GTPases to organize the cytoskeleton into a junction-fortifying arrangement that enhances the permeability barrier function of the endothelium. Ang-1 phosphorylates Tie-2 and its downstream effector phosphatidylinositol 3-kinase. This induces activation of one endogenous GTPase, Rac1, and inhibition of another, RhoA. Loss of either part of this dual effect abrogates the cytoskeletal and anti-permeability actions of Ang-1, suggesting that coordinated GTPase regulation is necessary for the vessel-sealing effects of Ang-1. p190 RhoGAP, a GTPase regulatory protein, provides this coordinating function as it is phosphorylated by Ang-1 treatment, requires Rac1 activation, and is necessary for RhoA inhibition. Ang-1 prevents the cytoskeletal and pro-permeability effects of endotoxin but requires p190 RhoGAP to do so. Treatment with p190 RhoGAP small interfering RNA completely abolishes the ability of Ang-1 to rescue endotoxemia-induced pulmonary vascular leak and inflammation in mice. We conclude that Ang-1 prevents vascular permeability by regulating the endothelial cytoskeleton through coordinated and opposite effects on the Rho GTPases Rac1 and RhoA. By linking Rac1 activation and RhoA inhibition, p190 RhoGAP is critical to the protective effects of Ang-1 against endotoxin. These results provide mechanistic evidence that targeting the endothelium through Tie-2 may offer specific therapeutic strategies in life-threatening endotoxemic conditions such as sepsis and acute respiratory distress syndrome.