Peripheral glial cells in both vertebrates and insects are born centrally and travel large distances to ensheathe axons in the periphery. There is very little known about how this migration is carried out. In other cells, it is known that rearrangement of the Actin cytoskeleton is an integral part of cell motility, yet the distribution of Actin in peripheral glial cell migration in vivo has not been previously characterized. To gain an understanding of how glia migrate, we specifically labeled the peripheral glia of Drosophila melanogaster using an Actin-GFP marker and analyzed their development in the embryonic PNS. It was found that Actin cytoskeleton is dynamically rearranged during glial cell migration. The peripheral glia were observed to migrate as a continuous chain of cells, with the leading glial cells appearing to participate to the greatest extent in exploring the extracellular surroundings with filopodia-like Actin containing projections. We hypothesized that the small GTPases Rho, Rac and Cdc42 are involved in Actin cytoskeletal rearrangements that underlie peripheral glial migration and nerve ensheathement. To test this, transgenic forms of the GTPases were ectopically expressed specifically in the peripheral glia during their migration and wrapping phases. The effects on glial Actin-GFP distribution and the overall effects on glial cell migration and morphological development were assessed. We found that RhoA and Rac1 have distinct roles in peripheral glial cell migration and nerve ensheathement; however, Cdc42 does not have a significant role in peripheral glial development. RhoA and Rac1 gain-of-function and loss-of-function mutants had both disruption of glial cell development and secondary effects on sensory axon fasciculation. Together, Actin cytoskeletal dynamics is an integral part of peripheral glial migration and nerve ensheathement, and is mediated by RhoA and Rac1.