T-cell homeostasis is essential for normal functioning of the immune system. IL-7 receptor (IL-7R) and T-cell receptor (TCR) signaling are pivotal for T-cell homeostatic regulation. The detailed mechanisms regulating T-cell homeostasis and how IL-7R and TCR signaling are coordinated are largely unknown. Here we demonstrate that T cell-specific deletion of cell-division cycle 42 (Cdc42) GTPase causes a profound loss of mature T cells. Deletion of Cdc42 leads to a markedly increased expression of growth factor independence-1 (Gfi-1) and represses expression of IL-7Rα. In the absence of Cdc42, aberrant ERK1/2 MAP kinase activity results in enhanced, TCR-mediated T-cell proliferation. In vivo reconstitution of effector-binding–defective Cdc42 mutants and the effector p21 protein-activated kinase 1 (PAK1) into Cdc42-deficient T cells showed that PAK1 is both necessary and sufficient for Cdc42-regulated T-cell homeostasis. Thus, T-cell homeostasis is maintained through a concerted regulation of Gfi-1–IL-7R–controlled cytokine responsiveness and ERK-mediated TCR signaling strength by the Cdc42-PAK1 signaling axis.