Gab1 and Gab2 are conserved scaffolding proteins that amplify and integrate signals stimulated by many growth factor receptors including the Met receptor. Gab1 acts to diversify the signal downstream from Met through the recruitment of multiple signaling proteins, and is essential for epithelial morphogenesis. However, whereas Gab1 and Gab2 are both expressed in epithelial cells, Gab2 fails to support a morphogenic response. We demonstrate that Gab1 and Gab2 are divergent in their function whereby Gab1, but not Gab2, promotes lamellipodia formation, and is localized to the membrane of lamellipodia upon Met activation. We have identified activation of ERK1/2 as a requirement for lamellipodia formation. Moreover, activated ERK1/2 are localized to lamellipodia in Gab1 expressing cells but not in cells that overexpress Gab2. By structure-function studies, we identify that enhanced membrane localization conferred through the addition of a myristoylation signal, together with the addition of the direct Met binding motif (MBM) from Gab1, are required to promote lamellipodia and confer a morphogenic signaling response to Gab2. Moreover, the morphogenesis competent myristoylated Gab2MBM promotes localization of activated ERK1/2 to the leading edge of lamellipodia in a similar manner to Gab1. Hence, subcellular localization of the Gab scaffold, as well as the ability of Gab to interact directly with the Met receptor, are both essential components of the morphogenic signaling response which involves lamellipodia formation and the localization of ERK1/2 activation in membrane ruffles.