The regulation of Rho-family GTPases is crucial to direct the formation of cell–cell junctions and tissue barriers. Cingulin (CGN) and paracingulin (CGNL1) control RhoA activation in epithelial cells by interacting with RhoA guanidine exchange factors. CGNL1 depletion also inhibits Rac1 activation during junction assembly. Here we show that, unexpectedly, Madin–Darby canine kidney epithelial cells depleted of both CGN and CGNL1 (double-KD cells) display normal Rac1 activation and tight junction (TJ) formation, despite decreased junctional recruitment of the Rac1 activator Tiam1. The expression of the Rac1 inhibitor MgcRacGAP is decreased in double-KD cells, and the barrier development and Rac1 activation phenotypes are rescued by exogenous expression of MgcRacGAP. MgcRacGAP colocalizes with CGN and CGNL1 at TJs and forms a complex and interacts directly in vitro with CGN and CGNL1. Depletion of either CGN or CGNL1 in epithelial cells results in decreased junctional localization of MgcRacGAP but not of ECT2, a centralspindlin-interacting Rho GEF. These results provide new insight into coordination of Rho-family GTPase activities at junctions, since apical accumulation of CGN and CGNL1 at TJs during junction maturation provides a mechanism to spatially restrict down-regulation of Rac1 activation through the recruitment of MgcRacGAP.