N-Methyl-D-aspartate (NMDA) receptors regulate structural plasticity by modulating actin organization within dendritic spines. Herein, we report identification and characterization of p250GAP, a novel GTPase-activating protein for Rho family proteins that interacts with the GluRepsilon2 (NR2B) subunit of NMDA receptors in vivo. The p250GAP mRNA was enriched in brain, with high expression in cortex, corpus striatum, hippocampus, and thalamus. Within neurons, p250GAP was highly concentrated in the postsynaptic density and colocalized with the GluRepsilon2 (NR2B) subunit of NMDA receptors and with postsynaptic density-95. p250GAP promoted GTP hydrolysis of Cdc42 and RhoA in vitro and in vivo. When overexpressed in neuroblastoma cells, p250GAP suppressed the activities of Rho family proteins, which resulted in alteration of neurite outgrowth. Finally, NMDA receptor stimulation led to dephosphorylation and redistribution of p250GAP in hippocampal slices. Together, p250GAP is likely to be involved in NMDA receptor activity-dependent actin reorganization in dendritic spines.