Proteolysis of the basement membrane and interstitial matrix occurs early in the angiogenic process and requires matrix metalloproteinase (MMP) activity. Skeletal muscle microvascular endothelial cells exhibit robust actin stress fibers, low levels of membrane type 1 (MT1)-MMP expression, and minimal MMP-2 activation. Depolymerization of the actin cytoskeleton increases MT1-MMP expression and MMP-2 activation. Rho family GTPases are regulators of actin cytoskeleton dynamics, and their activity can be modulated in response to angiogenic stimuli such as vascular endothelial growth factor (VEGF). Therefore, we investigated their roles in MMP-2 and MT1-MMP production. Endothelial cells treated with H1152 [an inhibitor of Rho kinase (ROCK)] induced stress fiber depolymerization and an increase in cortical actin. Both MMP-2 and MT1-MMP mRNA increased, which translated into greater MMP-2 protein production and activation. ROCK inhibition rapidly increased cell surface localization of MT1-MMP and increased PI3K activity, which was required for MMP-2 activation. Constitutively active Cdc42 increased cortical actin polymerization, phosphatidylinositol 3-kinase activity, MT1-MMP cell surface localization, and MMP-2 activation similarly to inhibition of ROCK. Activation of Cdc42 was sufficient to decrease RhoA activity. Capillary sprout formation in a three-dimensional collagen matrix was increased in cultures treated with RhoAN19 or Cdc42QL and, conversely, decreased in cultures treated with dominant negative Cdc42N17. VEGF stimulation also induced activation of Cdc42 while inhibiting RhoA activity. Furthermore, VEGF-dependent activation of MMP-2 was reduced by inhibition of Cdc42. These results suggest that Cdc42 and RhoA have opposing roles in regulating cell surface localization of MT1-MMP and MMP-2 activation.