We identified the GDI-1-regulated mechanism of RhoA activation from the Rho-GDI-1 complex and its role in mediating increased endothelial permeability. Thrombin stimulation failed to induce RhoA activation and actin stress fiber formation in human pulmonary arterial endothelial cells transduced with full-length GDI-1. Expression of a GDI-1 mutant form (C-GDI) containing the C terminus (aa 69 to 204) also prevented RhoA activation, whereas further deletions failed to alter RhoA activation. We observed that protein kinase Calpha-mediated phosphorylation of the C terminus of GDI-1 at Ser96 reduced the affinity of GDI-1 for RhoA and thereby enabled RhoA activation. Rendering GDI-1 phosphodefective with a Ser96 --> Ala substitution rescued the inhibitory activity of GDI-1 toward RhoA but did not alter the thrombin-induced activation of other Rho GTPases, i.e., Rac1 and Cdc42. Phosphodefective mutant GDI-1 also suppressed myosin light chain phosphorylation, actin stress fiber formation, and the increased endothelial permeability induced by thrombin. In contrast, expressing the phospho-mimicking mutant S96D-GDI-1 protein induced RhoA activity and increased endothelial permeability independently of thrombin stimulation. These results demonstrate the crucial role of the phosphorylation of the C terminus of GDI-1 at S96 in selectively activating RhoA. Inhibiting GDI-1 phosphorylation at S96 is a potential therapeutic target for modulating RhoA activity and thus preventing the increase in endothelial permeability associated with vascular inflammation.