The superoxide (O(2))-generating NADPH oxidase complex of phagocytes consists of a membrane-associated flavocytochrome (cytochrome b(559)) and four cytosolic proteins, p47(phox), p67(phox), p40(phox), and the small GTPase Rac (Rac1 or -2). NADPH oxidase activation (O(2) production) is elicited as the consequence of assembly of some or all cytosolic components with cytochrome b(559). This process can be reproduced in an in vitro system consisting of phagocyte membranes, p47(phox), p67(phox), and Rac, activated by an anionic amphiphile. We now show that post-translationally processed (prenylated) Rac1 initiates NADPH oxidase assembly, expressed in O(2) production, in a cell-free system containing phagocyte membrane vesicles and p67(phox), in the absence of an activating amphiphile and of p47(phox). Prenylated Cdc42Hs, a GTPase closely related to Rac, is inactive under the same conditions. Results obtained with phagocyte membrane vesicles can be reproduced fully by replacing these with partially purified cytochrome b(559), incorporated in phosphatidylcholine vesicles. Prenylated, but not nonprenylated, Rac1 binds spontaneously to phagocyte membrane vesicles and also to artificial, protein-free, phosphatidylcholine vesicles, a process counteracted by GDP dissociation inhibitor for Rho. Binding of prenylated Rac1 to membrane vesicles is accompanied by the recruitment of p67(phox) to the same location and the formation of an assembled NADPH oxidase complex, producing O(2) upon the addition of NADPH. Amphiphile and p47(phox)-independent NADPH oxidase activation by prenylated Rac1 is inhibited by Rho GDP dissociation inhibitor and by phosphatidylcholine vesicles, both competing with membrane for prenylated Rac1. We conclude that, in vitro, targeting of Rac to the phagocyte membrane is sufficient for the induction of NADPH oxidase assembly, suggesting that the principal or, possibly, the only role of Rac is to recruit cytosolic p67(phox) to the membrane environment, to be followed by the interaction of p67(phox) with cytochrome b(559).