The chimaerin family of Rac GTPase-activating proteins (GAPs) has been implicated in neural development and tumor progression, although the cellular mechanisms of their effects are poorly understood. To study their physiologic function, we used the Drosophila retina as a model system. Reduced expression of the fly chimaerin ortholog RhoGAP5a in the pupal eye led to an excess of interommatidial pigment cells, aberrant cell contacts, and an increase in activated ERK that localized specifically to the plasma membrane. Reducing RhoGAP5A levels suppressed the effects of disrupted EGF receptor signaling. Perturbation of Rac activity led to similar phenotypes, whereas coexpression of Rac and RhoGAP5A-dsRNAi resulted in the elimination of adherens junctions between interommatidial cells. Our results reveal a role for chimaerin in the regulation of ERK signaling and cell-cell adhesion and have implications for its participation in epithelial development and tumor progression.