The enzyme that catalyzes the synthesis of the major structural component of the yeast cell wall, beta(1-->3)-D-glucan synthase (also known as 1,3-beta-glucan synthase), requires a guanosine triphosphate (GTP) binding protein for activity. The GTP binding protein was identified as Rho1p. The rho1 mutants were defective in GTP stimulation of glucan synthase, and the defect was corrected by addition of purified or recombinant Rho1p. A protein missing in purified preparations from a rho1 strain was identified as Rho1p. Rho1p also regulates protein kinase C, which controls a mitogen-activated protein kinase cascade. Experiments with a dominant positive PKC1 gene showed that the two effects of Rho1p are independent of each other. The colocalization of Rho1p with actin patches at the site of bud emergence and the role of Rho1p in cell wall synthesis emphasize the importance of Rho1p in polarized growth and morphogenesis.