Diaphanous related formins (DRFs) are cytoskeleton remodeling proteins that mediate specific upstream GTPase signals to regulate cellular processes such as cytokinesis, cell polarity, and organelle motility. Previous work on the Rho-interacting DRF mDia has established that the biological activity of DRFs is regulated by an autoinhibitory interaction of a C-terminal diaphanous autoregulatory domain (DAD) with the DRF N terminus. This autoinhibition is released upon competitive binding of an activated GTPase to the N terminus of the DRF. Analyzing autoregulation of the Rac1-interacting DRF FHOD1, we utilized in vitro binding studies to identify a 60-amino acid DAD at the protein C terminus that recognizes an N-terminal formin homology (FH) 3 domain. Importantly, the FH3 domain of FHOD1 does not overlap with the proposed Rac1-binding domain. The FHOD1 DAD was found to contain one functional hydrophobic autoregulatory motif, while a previously uncharacterized basic cluster that is conserved in all DRF family DADs also contributed to the FH3-DAD interaction. Simultaneous mutation of both motifs efficiently released autoinhibition of FHOD1 in NIH3T3 cells resulting in the formation of actin stress fibers and increased serum response element transcription. A second putative hydrophobic autoregulatory motif N-terminal of the DAD belongs to a unique FHOD subdomain of yet undefined function. NMR structural analysis and size exclusion chromatography experiments revealed that the FHOD1 DAD is intrinsically unstructured with a tendency for a helical conformation in the hydrophobic autoregulation motif. Together, these data suggest that in FHOD1, DAD acts as signal sequence for binding to the well folded and monomeric FH3 domain and imply an activation mechanism that differs from competitive binding of Rac1 and DAD to one interaction site.Formin proteins are involved in the regulation of many cytoskeletal processes including cytokinesis, actin cable and stress fiber formation, polarity establishment, neurite outgrowth, and intracellular trafficking (reviewed in Refs. 1 and 2). These functions are achieved by their ability to promote F-actin assembly at the filament barbed end and to move processively with the barbed end as it elongates (3-7). Formins are large proteins of typically more than 1000 amino acids that are defined by the presence of two conserved regions, namely the formin homology 1 and 2 (FH1 and FH2) 2 domains (1). Additional conserved domains such as a N-terminal GTPase-binding domain (GBD) and a C-terminal diaphanous autoregulation domain (DAD) were found to constitute a formin subfamily, the diaphanous related formins (DRFs) (8). Over the last years, DRFs have emerged as a group of proteins with the potential to bridge between G-protein signals and the cytoskeleton via their ability to bind activated small GTPases and to subsequently remodel the cytoskeleton (9 -13).At present, phylogenetic analyses of FH2 domains suggest that metazoan formins fall into seven groups, termed Dia (diaphanous), DAAM (dishevelle...