Numerous studies indirectly implicate Rac GTPases in cancer. To investigate if Rac3 contributes to normal or malignant cell function, we generated rac3 null mutants through gene targeting. These mice were viable, fertile, and lacked an obvious external phenotype. This shows Rac3 function is dispensable for embryonic development. Bcr/Abl is a deregulated tyrosine kinase that causes chronic myelogenous leukemia and Ph-positive acute lymphoblastic leukemia in humans. Vav1, a hematopoiesis-specific exchange factor for Rac, was constitutively tyrosine phosphorylated in primary lymphomas from Bcr/Abl P190 transgenic mice, suggesting inappropriate Rac activation. rac3 is expressed in these malignant hematopoietic cells. Using lysates from BCR/ABL transgenic mice that express or lack rac3, we detected the presence of activated Rac3 but not Rac1 or Rac2 in the malignant precursor B-lineage lymphoblasts. In addition, in female P190 BCR/ABL transgenic mice, lack of rac3 was associated with a longer average survival. These data are the first to directly show a stimulatory role for Rac in leukemia in vivo. Moreover, our data suggest that interference with Rac3 activity, for example, by using geranyl-geranyltransferase inhibitors, may provide a positive clinical benefit for patients with Ph-positive acute lymphoblastic leukemia.