CEACAM1 is an intercellular adhesion glycoprotein. As CEACAM1 plays an important role in epithelial cell signaling and functions, we have examined its localization in epithelial cells. We have observed that distribution at cell contacts is not always seen in these cells, suggesting that CEACAM1 localization might be regulated. In Swiss 3T3 cells, the targeting of CEACAM1 at cell-cell boundaries is regulated by the Rho GTPases. In the present study, we have used the MDCK epithelial cells to characterize the effects of the Rho GTPases and their effectors on CEACAM1 intercellular targeting. Activated Cdc42 and Rac1 or their downstream effector PAK1 targeted CEACAM1 to sites of cell-cell contacts. On the other hand, neither activated RhoA nor activated Rho kinase directed CEACAM1 to cell boundaries, resulting in a condensed distribution of CEACAM1 at the cell surface. Interestingly, inhibition of this pathway resulted in CEACAM1 intercellular localization suggesting that a tightly regulated balance of Rho GTPase activities is necessary to target CEACAM1 at cell-cell boundaries. In addition, using CEACAM1 mutants and chimeric fusion constructs containing domains of the colony-stimulating factor receptor, we have shown that the transmembrane domain of CEACAM1 is responsible for the Cdc42-induced targeting at cell-cell contacts.