rac1 and rac2 p21s are ras p21-like small GTP-binding proteins which are implicated in the NADPH oxidase-catalyzed superoxide generation in phagocytes. rac1 and rac2 p21s have a Cys-A-A-Leu (A = aliphatic amino acid) structure in their C-terminal region which may undergo post-translational processing including prenylation, proteolysis, and carboxyl methylation. We studied the function of this post-translational processing of rac p21s in their interaction with the stimulatory and inhibitory GDP/GTP exchange proteins for rac p21s, named smg GDS and rho GDI, and in their NADPH oxidase activation. We produced human recombinant rac1 and rac2 p21s in insect cells and purified them from the membrane and soluble fractions as the post-translationally processed and unprocessed forms, respectively. Post-translationally processed rac1 and rac2 p21s were sensitive to both smg GDS and rho GDI, but post-translationally unprocessed rac1 and rac2 p21s were insensitive to them. The GTP gamma S (guanosine 5'-(3-O-thio)triphosphate)-bound form of post-translationally processed rac1 and rac2 p21s stimulated the NADPH oxidase activity, but post-translationally unprocessed rac1 and rac2 p21s were far less effective. These results indicate that both rac1 and rac2 p21s stimulate the NADPH oxidase activity and that their post-translational processing is important not only for their interaction with smg GDS and rho GDI but also for their NADPH oxidase activation.