Rho GTPases regulate several aspects of tissue morphogenesis during animal development. We found that mice lacking the Rho-inhibitory protein, p190-B RhoGAP, are 30% reduced in size and exhibit developmental defects strikingly similar to those seen in mice lacking the CREB transcription factor. In p190-B RhoGAP-deficient mice, CREB phosphorylation is substantially reduced in embryonic tissues. Embryo-derived cells contain abnormally high levels of active Rho protein, are reduced in size, and exhibit defects in CREB activation upon exposure to insulin or IGF-1. The cell size defect is rescued by expression of constitutively activated CREB, and in wild-type cells, expression of activated Rho or dominant-negative CREB results in reduced cell size. Together, these results suggest that activity of the Rho GTPase modulates a signal from insulin/IGFs to CREB that determines cell size and animal size during embryogenesis.