Cyclic AMP (cAMP) is a pleiotropic second messenger that regulates numerous cellular processes. In vascular smooth muscle cells (VSMCs), these include cell proliferation, migration, and contractility. Here we show that cAMP-elevating agents induce dramatic morphological changes in VSMCs, characterized by cell rounding and formation of long branching processes. The stellate morphology is associated with disassembly of actin stress fibers and lamellipodia, loss of focal adhesions, and the formation of small F-actin rings. Because of the importance of Rho family GTPases in regulating actin dynamics, we analyzed their individual roles in the cAMP phenotype. We found that pharmacological or genetic inhibition of Rac mimics cAMP effect in inducing a stellate morphology of VSMCs. Expression of activated Rac1 prevents forskolin-induced cAMP stellation, suggesting that cAMP affects cell morphology by inhibiting Rac function. Consistent with this, treatment with forskolin inhibits agonist-stimulated Rac activation in VSMCs. We further show that activated Rac1 containing the F37A effector loop substitution fails to rescue the cAMP phenotype. Our results suggest that cAMP modulates the morphology of VSMCs by inhibiting a Rac-dependent signaling pathway. © 2005 Wiley-Liss, Inc.