Rho GTPases are molecular switches that canonically signal from the plasma membrane or endomembranes to control a wide variety of cellular processes. Their activation is tightly regulated spatiotemporally via regulatory proteins and post-translational modifications. Here, I summarize the recently appreciated consequences of GTPase C-terminal phosphorylation on their localization, effector utilization and biological functions. I also describe in detail the use of recruitment assays for monitoring the subcellular locations of GTPase activity. Misregulation of Rho GTPases is associated with many types of cancer. For example, Rho Guanine nucleotide exchange factors (GEFs), which stimulate exchange of GDP for GTP to turn GTPases on, are frequently found overexpressed in tumors and often are necessary for cellular transformation. Here I report validation of a RhoGEF inhibitor with a dose-dependent selectivity for Rho GTPase signaling and anti-transformation activity. I have focused primarily on the RhoGEF Ect2 and its role in ovarian tumors, where it is chromosomally amplified and its mRNA is overexpressed. I observed that Ect2 protein is highly expressed and predominantly nuclear, and that nuclear but not cytoplasmic Ect2 increases with advanced ovarian disease. Knockdown of Ect2 decreased anchorage-independent (but not anchorage-dependent) growth of ovarian cancer cell lines. Restoration of Ect2 expression rescued the anchorage-independent growth defect, which required both the DH catalytic domain and the nuclear localization sequences (NLS) of Ect2. This suggested a novel mechanism whereby Ect2 could drive transformation in ovarian cancer cells by acting as a RhoGEF within the nucleus. Interestingly, Ect2 had an intrinsically distinct GTPase specificity profile in the nucleus versus the cytoplasm. Nuclear Ect2 bound preferentially to Rac1, while cytoplasmic Ect2 bound to RhoA but not Rac. Consistent with nuclear activation of endogenous Rac, Ect2 overexpression recruited Rac effectors to the nucleus, a process that required a functional Ect2 catalytic domain. Further, expression of active nuclear Rac1 rescued the defect in transformed growth caused by Ect2 knockdown. My work suggests a novel mechanism of Ect2-driven transformation, identifies subcellular localization as a regulator of GEF specificity, and implicates activation of nuclear Rac1 in cellular transformation.