Allograft Inflammatory Factor-1 (AIF-1) is a cytoplasmic, calcium-binding, inflammation-responsive scaffold protein involved in VSMC migration and proliferation. The objective of this study is to characterize AIF-1 functional protein interactions that may regulate VSMC activation. Through use of a bacterial two-hybrid screen, we identified a molecular interaction between AIF-1 and the small GTPase, Rac2 which was verified by pull-down and co-localization experiments. This was unexpected in that Rac2 expression had been considered to be restricted to hematopoetic cells. The Rac2/AIF-1 interaction is functional, in that; a loss-of function, point-mutated AIF-1 does not interact with Rac2; Rac2 colocalizes with AIF-1 in the cytoplasm of VSMC, and co-translocates to lamellopodia upon PDGF stimulation; and AIF-1 expression in VSMC leads to Rac2 activation. Because Rac2 function in VSMC had not been described, we focused on characterization of its function in these cells. Rac2 protein expression in VSMC is inducible by inflammatory cytokines, and Rac2 activation in VSMC is also responsive to inflammatory cytokines. Rac2 expression and activation patterns differ from the ubiquitously expressed Rac1. We hypothesized that Rac2 participates in VSMC activation. Retroviral over expression of Rac2 in primary VSMC leads to increased migration, activation of the NAPDH oxidation cascade, and increased activation of the Rac2 effector protein Pak1, and its proximal effectors, ERK1/2, and p38 (P<0.05 for all). The major points of this study indicate a functional interaction between AIF-1 and Rac2 in VSMC leading to Rac2 activation, and a potential function for Rac2 in inflammation-driven VSMC response to injury.