This work reports the isolation and molecular characterization of CDC42 and RAC1 cDNAs from the ectomycorrhiza forming filamentous homobasidiomycete Suillus bovinus. Previously, no RAC gene was described from filamentous fungi and no CDC42 gene was described from homobasidiomycetes. Southern hybridization with SbCDC42 and SbRAC1 cDNAs indicated that the S. bovinus genome contains only one CDC42 and one RAC1 gene. The predicted amino acid sequence of SbRaclp is 77% identical with the Rac1B protein of chick, whereas SbCdc42p is most identical with Schizosaccharomyces pombe Cdc42p, showing 88% identity. In the predicted amino acid sequences of SbRaclp and SbCdc42p, the five guanine nucleotide binding regions, switch I and II, and the effector domain are highly identical to those known in other small GTPases. These domain structures suggest that in S. bovinus, SbRac1p and SbCdc42p function as molecular switches regulating the organization of actin cytoskeleton, similar to yeasts and mammals. SbRAC1 and SbCDC42 were expressed in vegetative and ectomycorrhizal hyphae, and SbCdc42p was detected in ectomycorrhiza-forming hyphae if growth and differentiation of the symbiotic hyphae took place. Cdc42p and actin were localized at the tips of S. bovinus vegetative hyphae. Similar to yeast, in filamentous fungi Cdc42p may be necessary to maintain the actin cytoskeleton at hyphal tips, making the polarized growth of the hyphae possible. In developing ectomycorrhiza, Cdc42p and actin were visualized in association with plasma membrane in swollen cells typical to the symbiotic hyphae. The role of Cdc42p and actin in regulation of the growth pattern and morphogenesis of ectomycorrhizal hyphae is discussed.