In many cell types it is evident that the small GTPases Rac and Rho regulate each other's activities. What is unclear is exactly how this regulation occurs. To further elucidate this interaction we examined the activities of Rac1 and Rho1 in Drosophila cellular immune surveillance cells. In larvae the cellular immune response involves circulating cells (hemocytes) that can be recruited from a hematopoietic organ located behind the brain, as well as a sessile population found just underneath the larval cuticle. We demonstrate for the first time that Rho-kinase activation requires both Rho1 and the Drosophila c-Jun N-terminal kinase (Basket). We also show that Rac1, via Basket, regulates Rho1 activity, possibly by inhibiting RhoGAPp190. In the reciprocal pathway, co-expression of dominant negative Rho-kinase and constitutive active Rho1 induces a Rac1-like phenotype. This induction requires the formin Diaphanous. Co-expression of dominant negative Rho-kinase and constitutive active Rho1 also induces filopodia formation, with Diaphanous enriched at the tips. The Rac1-like phenotypes, and filopodia formation, could be blocked by co-expression of dominant negative Rac1. Finally, though dominant negative Rac1 is able to block filopodia formation in the overexpression experiments, only Rac2 is necessary for filopodia formed by hemocytes after parasitization.