Maintenance of the epithelial phenotype is crucial for tissue homeostasis. In the retina, dedifferentiation and loss of integrity of the retinal pigment epithelium (RPE) leads to retinal dysfunction and fibrosis. Transforming growth factor (TGF)-beta critically contributes to RPE dedifferentiation and induces various responses, including increased Rho signaling, up-regulation of alpha-smooth muscle actin (SMA), and cell migration and dedifferentiation. Cellular TGF-beta responses are stimulated by different signal transduction pathways: some are Smad dependent and others Smad independent. Alterations in Rho signaling are crucial to both types of TGF-beta signaling, but how TGF-beta-stimulates Rho signaling is poorly understood. Here, we show that primary RPE cells up-regulated GEF-H1 in response to TGF-beta. GEF-H1 was the only detectable Rho exchange factor increased by TGF-beta1 in a genome-wide expression analysis. GEF-H1 induction was Smad4-dependant and led to Rho activation. GEF-H1 inhibition counteracted alpha-SMA up-regulation and cell migration. In patients with retinal detachments and fibrosis, migratory RPE cells exhibited increased GEF-H1 expression, indicating that induction occurs in diseased RPE in vivo. Our data indicate that GEF-H1 is a target and functional effector of TGF-beta by orchestrating Rho signaling to regulate gene expression and cell migration, suggesting that it represents a new marker and possible therapeutic target for degenerative and fibrotic diseases.