The BNIP-2 and Cdc42GAP homology (BCH) domain is a novel regulator for Rho GTPases, but its impact on p50-Rho GTPase-activating protein (p50RhoGAP or Cdc42GAP) in cells remains elusive. Here we show that deletion of the BCH domain from p50RhoGAP enhanced its GAP activity and caused drastic cell rounding. Introducing constitutively active RhoA or inactivating GAP domain blocked such effect, whereas replacing the BCH domain with endosome-targeting SNX3 excluded requirement of endosomal localization in regulating the GAP activity. Substitution with homologous BCH domain from Schizosaccharomyces pombe, which does not bind mammalian RhoA, also led to complete loss of suppression. Interestingly, the p50RhoGAP BCH domain only targeted RhoA, but not Cdc42 or Rac1, and it was unable to distinguish between GDP and the GTP-bound form of RhoA. Further mutagenesis revealed a RhoA-binding motif (residues 85-120), which when deleted, significantly reduced BCH inhibition on GAP-mediated cell rounding, whereas its full suppression also required an intramolecular interaction motif (residues 169-197). Therefore, BCH domain serves as a local modulator in cis to sequester RhoA from inactivation by the adjacent GAP domain, adding to a new paradigm for regulating p50RhoGAP signaling.