We previously showed that the transcription factor Pax3 regulates mesenchymal-to-epithelial transition (MET) in cultured osteogenic Saos-2 cells. Herein we demonstrate that Pax3 induced MET in these cells requires intact Pax3 DNA binding motifs and is associated with the altered expression and activity of numerous proteins involved in signal transduction pathways that regulate cytoskeleton remodeling, the majority of which were not previously detected by mRNA expression array analysis. Proper levels of active Rho GTPases are essential for Pax3 induced MET. Rac activity and actomyosin contractility via Rho/ROCK signaling are required for the formation of circumferential actin bundles, epithelial discoid cell shape and the regulation of membrane protrusions. Precise spatial activation of Rho GTPase signaling components is also paramount for MET. Endogenous PAK2, Rac1 and PIX, a Rac/Cdc42-GEF, localize to focal adhesions. Dynamic localization of PAK and PIX to focal adhesions is required for Pax3 induced MET and is dependent on full PAK activity because kinase dead or GTPase-binding deficient mutants of PAK sequester PIX at focal adhesions and disrupt Pax3 induced phenotypic MET. All together, our results define roles for Rho GTPases and their effectors in MET and newly identify proteins and signal transduction cascades regulated by Pax3.