The signaling pathways mediated by Rho family GTPases have been implicated in many aspects of cell biology. The specificity of the pathways is achieved in part by the selective interaction between Dbl family guanine nucleotide exchange factors (GEFs) and their Rho GTPase substrates. Here, we report a first-generation small-molecule inhibitor of Rac GTPase targeting Rac activation by GEF. The chemical compound NSC23766 was identified by a structure-based virtual screening of compounds that fit into a surface groove of Rac1 known to be critical for GEF specification. In vitro it could effectively inhibit Rac1 binding and activation by the Rac-specific GEF Trio or Tiam1 in a dose-dependent manner without interfering with the closely related Cdc42 or RhoA binding or activation by their respective GEFs or with Rac1 interaction with BcrGAP or effector PAK1. In cells, it potently blocked serum or platelet-derived growth factor-induced Rac1 activation and lamellipodia formation without affecting the activity of endogenous Cdc42 or RhoA. Moreover, this compound reduced Trio or Tiam1 but not Vav, Lbc, Intersectin, or a constitutively active Rac1 mutant-stimulated cell growth and suppressed Trio, Tiam1, or Ras-induced cell transformation. When applied to human prostate cancer PC-3 cells, it was able to inhibit the proliferation, anchorage-independent growth and invasion phenotypes that require the endogenous Rac1 activity. Thus, NSC23766 constitutes a Rac-specific small-molecule inhibitor that could be useful to study the role of Rac in various cellular functions and to reverse tumor cell phenotypes associated with Rac deregulation.