RhoA, a small GTPase, regulates epithelial integrity and morphogenesis by controlling filamentous actin assembly and actomyosin contractility. Another important cytoskel-etal regulator, Moesin (Moe), an ezrin, radixin, and moesin (ERM) protein, has the ability to bind to and organize cortical F-actin, as well as the ability to regulate RhoA activity. ERM proteins have previously been shown to interact with both RhoGEF (guanine nucleotide exchange factors) and RhoGAP (GTPase activating proteins), proteins that control the activation state of RhoA, but the functions of these interactions remain unclear. We demonstrate that Moe interacts with an unusual RhoGAP, Conundrum (Conu), and recruits it to the cell cortex to negatively regulate RhoA activity. In addition, we show that cortically localized Conu can promote cell proliferation and that this function requires RhoGAP activity. Surprisingly, Conu's ability to promote growth also appears dependent on increased Rac activity. Our results reveal a molecular mechanism by which ERM proteins control RhoA activity and suggest a novel linkage between the small GTPases RhoA and Rac in growth control.