Levels of active Rac1 at epithelial junctions are partially modulated via interaction with Ajuba, an actin binding and scaffolding protein. Here we demonstrate that Ajuba interacts with the Cdc42 GTPase activating protein CdGAP, a GAP for Rac1 and Cdc42, at cell-cell contacts. CdGAP recruitment to junctions does not require Ajuba; rather Ajuba seems to control CdGAP residence at sites of cell-cell adhesion. CdGAP expression potently perturbs junctions and Ajuba binding inhibits CdGAP activity. Ajuba interacts with Rac1 and CdGAP via distinct domains and can potentially bring them in close proximity at junctions to facilitate activity regulation. Functionally, CdGAP-Ajuba interaction maintains junctional integrity in homeostasis and diseases: (i) gain-of-function CdGAP mutants found in Adams-Oliver Syndrome patients strongly destabilize cell-cell contacts and (ii) CdGAP mRNA levels are inversely correlated with E-cadherin protein expression in different cancers. We present conceptual insights on how Ajuba can integrate CdGAP binding and inactivation with the spatio-temporal regulation of Rac1 activity at junctions. Ajuba provides a novel mechanism due to its ability to bind to CdGAP and Rac1 via distinct domains and influence the activation status of both proteins. This functional interplay may contribute towards conserving the epithelial tissue architecture at steady-state and in different pathologies.