Multinucleated giant cells are formed by the fusion of macrophages and are a characteristic feature in numerous pathophysiological conditions including the foreign body response (FBR). Foreign body giant cells (FBGCs) are inflammatory and destructive multinucleated macrophages and may cause damage and/or rejection of implants. However, while these features of FBGCs are well established, the molecular mechanisms underlying their formation remain elusive. Improved understanding of the molecular mechanisms underlying the formation of FBGCs may permit the development of novel implants that eliminate or reduce the FBR. Our previous study showed that transient receptor potential vanilloid 4 (TRPV4), a mechanosensitive ion channel/receptor, is required for FBGC formation and FBR to biomaterials. Here, we have determined that (a) TRPV4 is directly involved in fusogenic cytokine (interleukin-4 plus granulocyte macrophage-colony stimulating factor)-induced activation of Rac1, in bone marrow-derived macrophages; (b) TRPV4 directly interacts with Rac1, and their interaction is further augmented in the presence of fusogenic cytokines; (c) TRPV4-dependent activation of Rac1 is essential for the augmentation of intracellular stiffness and regulation of cytoskeletal remodeling; and (d) TRPV4-Rac1 signaling axis is critical in fusogenic cytokine-induced FBGC formation. Together, these data suggest a novel mechanism whereby a functional interaction between TRPV4 and Rac1 leads to cytoskeletal remodeling and intracellular stiffness generation to modulate FBGC formation.