Rac1 and Rac3 are highly homologous regulatory proteins that belong to the small GTPases of the Rho family. Previously, we showed that Rac3 induces cell rounding and prevents neuronal differentiation, in contrast to its close relative Rac1, which stimulates cell spreading and neuritogenesis. To explain these opposing effects, we investigated whether Rac1 and Rac3 interact with different proteins. Here, we show that both Rac1 and Rac3 interact with GIT1, a multifunctional Arf-GAP protein, which regulates cell-matrix adhesion, cell spreading and endocytosis. However, in contrast to Rac1, the Rac3-GIT1 interaction is not mediated by βPix. Interestingly, Rac3 expression severely attenuates the interaction between GIT1 and paxillin, accompanied by defective paxillin distribution, focal adhesion formation and disturbed cell spreading. Moreover, in Rac3-expressing cells, Arf6 activity is strongly reduced and the Arf6-GAP activity of GIT1 is required for Rac3 downstream signaling. Indeed, expression of wild-type Arf6 or the Arf6-GEF ARNO induced cell spreading in the otherwise rounded Rac3-expressing cells. Our data suggest that Rac3 and Rac1 oppose each other's function by differently modulating GIT1 signaling. Rac1 induces adhesion and differentiation by activating PAK1 and stimulating the GIT1-paxillin interaction, whereas Rac3 blocks this interaction and inactivates Arf6 by stimulating the GAP function of GIT1, thereby preventing cell spreading and differentiation.