Bone marrow engraftment in the context of hematopoietic stem cell and progenitor (HSC/P) transplantation is based on the ability of intravenously administered cells to lodge in the medullary cavity and be retained in the appropriate marrow space, a process referred to as homing. It is likely that homing is a multistep process, encompassing a sequence of highly regulated events that mimic the migration of leukocytes to inflammatory sites. In leukocyte biology, this process includes an initial phase of tethering and rolling of cells to the endothelium via E- and P-selectins, firm adhesion to the vessel wall via integrins that appear to be activated in an "inside-out" fashion, transendothelial migration, and chemotaxis through the extracellular matrix (ECM) to the inflammatory nidus. For HSC/P, the cells appear to migrate to the endosteal space of the bone marrow. A second phase of engraftment involves the subsequent interaction of specific HSC/P surface receptors, such as alpha(4)beta(1) integrin receptors with vascular cell-cell adhesion molecule-1 and fibronectin in the ECM, and interactions with growth factors that are soluble, membrane, or matrix bound. We have utilized knockout and conditional knockout mouse lines generated by gene targeting to study the role of Rac1 and Rac2 in blood cell development and function. We have determined that Rac is activated via stimulation of CXCR4 by SDF-1, by adhesion via beta(1) integrins, and via stimulation of c-kit by the stem cell factor-all of which involved in stem cell engraftment. Thus Rac proteins are key molecular switches of HSC/P engraftment and marrow retention. We have defined Rac proteins as key regulators of HSC/P cell function and delineated key unique and overlapping functions of these two highly related GTPases in a variety of primary hematopoietic cell lineages in vitro and in vivo. Further, we have begun to define the mechanisms by which each GTPase leads to specific functions in these cells. These studies have led to important new understanding of stem cell bone marrow retention and trafficking in the peripheral circulation and to the development of a novel small molecule inhibitor that can modulate stem cell functions, including adhesion, mobilization, and proliferation. This chapter describes the biochemical footprint of stem cell engraftment and marrow retention related to Rho GTPases. In addition, it reviews abnormalities of Rho GTPases implicated in human immunohematopoietic diseases and in leukemia/lymphoma.