Rho family small GTPases are important regulators of neuronal development. Defective Rho regulation causes nervous system dysfunctions including mental retardation and Alzheimer's disease. Rac1, a member of the Rho family, regulates dendritic spines and excitatory synapses, but relatively little is known about how synaptic Rac1 is negatively regulated. Breakpoint cluster region (BCR) is a Rac GTPase-activating protein known to form a fusion protein with the c-Abl tyrosine kinase in Philadelphia chromosome-positive chronic myelogenous leukemia. Despite the fact that BCR mRNAs are abundantly expressed in the brain, the neural functions of BCR protein have remained obscure. We report here that BCR and its close relative active BCR-related (ABR) localize at excitatory synapses and directly interact with PSD-95, an abundant postsynaptic scaffolding protein. Mice deficient for BCR or ABR show enhanced basal Rac1 activity but only a small increase in spine density. Importantly, mice lacking BCR or ABR exhibit a marked decrease in the maintenance, but not induction, of long-term potentiation, and show impaired spatial and object recognition memory. These results suggest that BCR and ABR have novel roles in the regulation of synaptic Rac1 signaling, synaptic plasticity, and learning and memory, and that excessive Rac1 activity negatively affects synaptic and cognitive functions.