Ral proteins constitute a distinct family of Ras-related GTPases. Although similar to Ras in amino acid sequence, Ral proteins are activated by a unique nucleotide exchange factor and inactivated by a distinct GTPase-activating protein. Unlike Ras, they fail to promote transformed foci when activated versions are expressed in cells. To identify downstream targets that might mediate a Ral-specific function, we used a Saccharomyces cerevisiae-based interaction assay to clone a novel cDNA that encodes a Ral-binding protein (RalBP1). RalBP1 binds specifically to the active GTP-bound form of RalA and not to a mutant Ral with a point mutation in its putative effector domain. In addition to a Ral-binding domain, RalBP1 also contains a Rho-GTPase-activating protein domain that interacts preferentially with Rho family member CDC42. Since CDC42 has been implicated in bud site selection in S. cerevisiae and filopodium formation in mammalian cells, Ral may function to modulate the actin cytoskeleton through its interactions with RalBP1.