An important signaling pathway to the actin cytoskeleton links the Rho family GTPase Cdc42 to the actin-nucleating Arp2/3 complex through N-WASP. Nevertheless, these previously identified components are not sufficient to mediate Cdc42-induced actin polymerization in a physiological context. In this paper, we describe the biochemical purification of Toca-1 (transducer of Cdc42-dependent actin assembly) as an essential component of the Cdc42 pathway. Toca-1 binds both N-WASP and Cdc42 and is a member of the evolutionarily conserved PCH protein family. Toca-1 promotes actin nucleation by activating the N-WASP-WIP/CR16 complex, the predominant form of N-WASP in cells. Thus, the cooperative actions of two distinct Cdc42 effectors, the N-WASP-WIP complex and Toca-1, are required for Cdc42-induced actin assembly. These findings represent a significantly revised view of Cdc42-signaling and shed light on the pathogenesis of Wiskott-Aldrich syndrome.