RhoA activity is transiently inhibited at the initial phase of integrin engagement, when Cdc42- and/or Rac1-mediated membrane spreading and ruffling predominantly occur. Paxillin, an integrin-assembly protein, has four major tyrosine phosphorylation sites, and the phosphorylation of Tyr31 and Tyr118 correlates with cell adhesion and migration. We found that mutation of Tyr31/118 caused enhanced activation of RhoA and premature formation of stress fibers with substantial loss of efficient membrane spreading and ruffling in adhesion and migration of NMuMG cells. These phenotypes were similar to those induced by RhoA(G14V) in parental cells, and could be abolished by expression of RhoA(T19N), Rac1(G12V), or p190RhoGAP in the mutant-expressing cells. Phosphorylated Tyr31/118 was found to bind to two src homology (SH)2 domains of p120RasGAP, with coprecipitation of endogenous paxillin with p120RasGAP. p190RhoGAP is known to be a major intracellular binding partner for the p120RasGAP SH2 domains. We found that Tyr31/118-phosphorylated paxillin competes with p190RhoGAP for binding to p120RasGAP, and provides evidence that p190RhoGAP freed from p120RasGAP efficiently suppresses RhoA activity during cell adhesion. We conclude that Tyr31/118-phosphorylated paxillin serves as a template for the localized suppression of RhoA activity and is necessary for efficient membrane spreading and ruffling in adhesion and migration of NMuMG cells.