Rac1 is a small GTPase involved in actin cytoskeleton organization and polarized cell growth in many organisms. In this study, we investigate the biological function of MgRac1, a Rac1 homolog in Magnaporthe grisea. The MgRac1 deletion mutants are defective in conidial production. Among the few conidia generated, they are malformed and defective in appressorial formation and consequently lose pathogenicity. Genetic complementation with native MgRac1 fully recovers all these defective phenotypes. Consistently, expression of a dominant negative allele of MgRac1 exhibits the same defect as the deletion mutants, while expression of a constitutively active allele of MgRac1 can induce abnormally large conidia with defects in infection-related growth. Furthermore, we show the interactions between MgRac1 and its effectors, including the PAK kinase Chm1 and NADPH oxidases (Nox1 and Nox2), by the yeast two-hybrid assay. While the Nox proteins are important for pathogenicity, the MgRac1-Chm1 interaction is responsible for conidiogenesis. A constitutively active Chm1 mutant, in which the Rac1-binding PBD domain is removed, fully restores conidiation of the MgRac1 deletion mutants, but these conidia do not develop appressoria normally and are not pathogenic to rice plants. Our data suggest that the MgRac1-Chm1 pathway is responsible for conidiogenesis, but additional pathways, including the Nox pathway, are necessary for appressorial formation and pathogenicity.