Recent progress in our understanding of the regulation of the phagocyte NADPH oxidase by the Rac GTP-binding protein(s) has provided the first detailed glimpse into the mechanisms of leukocyte regulation by a small GTP-binding protein. Studies over the past year have indicated that the activity of the NADPH oxidase can be modulated by regulation of the GTP/GDP state of Rac. Proteins exist in leukocytes that are able to modify GTP-binding protein function in this manner, and their activity may be regulated by signals generated upon phagocyte stimulation.