The Rho GTPases play an important role in transducing signals linking plasma membrane receptors to the organization of the cytoskeleton and also regulate gene transcription. Here, we show that expression of constitutively active Ras or Cdc42, but not RhoA, RhoG, and Rac1, is sufficient to cause anchorage-independent cell cycle progression of mouse embryonic fibroblasts. However, in anchorage free conditions, whereas activation of either Cdc42 or Ras results in cyclin A transcription and cell cycle progression, Cdc42 is not required for Ras-mediated cyclin A induction, and the two proteins act in a synergistic manner in this process. Surprisingly, the ability of Cdc42 to induce p38 MAPK activity in suspended mouse embryonic fibroblast was impaired. Moreover, inhibition of p38 activity allowed Rac1 to induce anchorage-independent cyclin A transcription, indicating that p38 MAPK has an inhibitory function on cell cycle progression of primary fibroblasts. Finally, a Rac mutant, which is unable to induce lamellipodia and focal complex formation, promoted cyclin A transcription in the presence of SB203580, suggesting that the organization of the cytoskeleton is not required for anchorage-independent proliferation. This demonstrates a novel function for Cdc42, distinct from that of Rac1, in the control of cell proliferation.