Growth, guidance and branching of axons are all essential processes for the precise wiring of the nervous system. Rho family GTPases transduce extracellular signals to regulate the actin cytoskeleton. In particular, Rac has been implicated in axon growth and guidance. Here we analyse the loss-of-function phenotypes of three Rac GTPases in Drosophila mushroom body neurons. We show that progressive loss of combined Rac1, Rac2 and Mtl activity leads first to defects in axon branching, then guidance, and finally growth. Expression of a Rac1 effector domain mutant that does not bind Pak rescues growth, partially rescues guidance, but does not rescue branching defects of Rac mutant neurons. Mosaic analysis reveals both cell autonomous and non-autonomous functions for Rac GTPases, the latter manifesting itself as a strong community effect in axon guidance and branching. These results demonstrate the central role of Rac GTPases in multiple aspects of axon development in vivo, and suggest that axon growth, guidance and branching could be controlled by differential activation of Rac signalling pathways.