Cytokinesis ensures the successful completion of the cell cycle and distribution of chromosomes, organelles, and cytoplasm between daughter cells. It is accomplished by formation and constriction of an actomyosin contractile ring that drives the progression of a cleavage furrow. Microinjection experiments and in vitro transfection assays have suggested a requirement for small GTPases of the Rho family in cytokinesis. Yet, the identity of proteins regulating Rho signaling pathways during cytokinesis remains unknown. Here we show that in Drosophila, Pebble (Pbl), a putative exchange factor for Rho GTPases (RhoGEF), is required for the formation of the contractile ring and initiation of cytokinesis. The dynamics of Pbl expression and its distribution during mitosis, as well as structure-function analysis, indicate that it is a key regulatory component of the pathway. pbl interacts genetically with Rho1, but not with Rac1 or Cdc42, and Pbl and Rho1 proteins interact in vivo in yeast. Similar to mutations in pbl, loss of Rho1 or expression of a dominant-negative Rho1 blocks cytokinesis. Our results identify Pbl as a RhoGEF specifically required for cytokinesis and linked through Rho1 activity to the reorganization of the actin cytoskeleton at the cleavage furrow.