Spatiotemporal regulation of signaling cascades is crucial for various biological pathways, under the control of a range of scaffolding proteins. The BNIP-2 and Cdc42GAP Homology (BCH) domain is a highly conserved module that targets small GTPases and their regulators. Proteins bearing BCH domains are key for driving cell elongation, retraction, membrane protrusion, and other aspects of active morphogenesis during cell migration, myoblast differentiation, and neuritogenesis. We previously showed that the BCH domain of p50RhoGAP (ARHGAP1) sequesters RhoA from inactivation by its adjacent GAP domain; however, the underlying molecular mechanism for RhoA inactivation by p50RhoGAP remains unknown. Here, we report the crystal structure of the BCH domain of p50RhoGAP  Schizosaccharomyces pombe  and model the human p50RhoGAP BCH domain to understand its regulatory function using in vitro and cell line studies. We show that the BCH domain adopts an intertwined dimeric structure with asymmetric monomers and harbors a unique RhoA-binding loop and a lipid-binding pocket that anchors prenylated RhoA. Interestingly, the β5-strand of the BCH domain is involved in an intermolecular β-sheet, which is crucial for inhibition of the adjacent GAP domain. A destabilizing mutation in the β5-strand triggers the release of the GAP domain from autoinhibition. This renders p50RhoGAP active, thereby leading to RhoA inactivation and increased self-association of p50RhoGAP molecules via their BCH domains. Our results offer key insight into the concerted spatiotemporal regulation of Rho activity by BCH domain-containing proteins.