The Rho GTPase family member RhoE inhibits RhoA/ROCK signaling to promote actin stress fiber and focal adhesion disassembly. We have previously reported that RhoE also inhibits cell cycle progression and Ras-induced transformation, specifically preventing cyclin D1 translation. Here we investigate the molecular mechanisms underlying those observations. RhoE inhibits the phosphorylation of the translational repressor 4E-BP1 in response to extracellular stimuli. However, RhoE does not affect the activation of mTOR, the major kinase regulating 4E-BP1 phosphorylation, as indicated by the phosphorylation levels of the mTOR substrate S6K, the dynamics of mTOR/Raptor association, and the observation that RhoE, as opposed to rapamycin, does not impair cellular growth. Interestingly, RhoE prevents the release of the eukaryotic initiation factor eIF4E from 4E-BP1, inhibiting cap-dependent translation. Accordingly, RhoE also inhibits the expression and the transcriptional activity of the eIF4E target c-Myc. Consistent with its crucial role in cell proliferation, we show that eIF4E can rescue both cell cycle progression and Ras-induced transformation in RhoE-expressing cells, indicating that the inhibition of eIF4E function is critical to mediate the anti-proliferative effects of RhoE.