Activation of the small GTPase RhoA following angiotensin II stimulation is known to result in actin reorganization and stress fiber formation. Full activation of RhoA, by angiotensin II, depends on the scaffolding protein ␤-arrestin 1, although the mechanism behind its involvement remains elusive. Here we uncover a novel partner and function for ␤-arrestin 1, namely, in binding to ARHGAP21 (also known as ARHGAP10), a known effector of RhoA activity, whose GTPase-activating protein (GAP) function it inhibits. Using yeast two-hybrid screening, a peptide array, in vitro binding studies, truncation analyses, and coimmunoprecipitation techniques, we show that ␤-arrestin 1 binds directly to ARHGAP21 in a region that transects the RhoA effector GAP domain. Moreover, we show that the level of a complex containing ␤-arrestin 1 and ARHGAP21 is dynamically increased following angiotensin stimulation and that the kinetics of this interaction modulates the temporal activation of RhoA. Using information gleaned from a peptide array, we developed a cell-permeant peptide that serves to inhibit the interaction of these proteins. Using this peptide, we demonstrate that disruption of the ␤-arrestin 1/ARHGAP21 complex results in a more active ARHGAP21, leading to lessefficient signaling via the angiotensin II type 1A receptor and, thereby, attenuation of stimulated stress fiber formation.