The nonreceptor Abl tyrosine kinase stimulates F-actin microspikes and membrane ruffles in response to adhesion and growth factor signals. We show here that induced dimerization of Abl-FKBP, but not the kinase-defective AblKD-FKBP, inhibits cell spreading on fibronectin. Conversely, knockdown of cellular Abl by shRNA stimulates cell spreading. The Abl kinase inhibitor, imatinib, also stimulates cell spreading and its effect is overridden by the imatinib-resistant AblT315I. Expression of Abl but not AbkKD in Abl/Arg-deficient cells again inhibits spreading. Furthermore, Abl inhibits spreading of cells that express the activated Rac, RacV12, correlating with RacV12 localization to dorsal membrane protrusions. Ectopic expression of CrkII, a Rac activator that is inactivated by Abl-mediated tyrosine phosphorylation, antagonizes Abl-mediated dorsal membrane localization of RacV12. Ectopic expression of a dynamin-2 mutant, previously shown to induce Rac-GTP localization to the dorsal membrane, abolishes the stimulatory effect of imatinib on cell spreading. These results suggest that Abl tyrosine kinase, through CrkII phosphorylation and in collaboration with dynamin-2 can regulate the partitioning of Rac-GTP to favor dorsal ruffles during cell spreading. The Abl-dependent dorsal membrane localization of activated Rac explains its positive role in ruffling and negative role in cell spreading and migration.