Proteins in the Rho family are small monomeric GTPases primarily involved in polarization, control of cell division, and reorganization of cytoskeletal elements. Phylogenetic analysis of predicted fungal Rho proteins suggests that a new Rho-type GTPase family, whose founding member is Rho4 from the archiascomycete Schizosaccharomyces pombe, is involved in septation. S. pombe rho4Delta mutants have multiple, abnormal septa. In contrast to S. pombe rho4Delta mutants, we show that strains containing rho-4 loss-of-function mutations in the filamentous fungus Neurospora crassa lead to a loss of septation. Epitope-tagged RHO-4 localized to septa and to the plasma membrane. In other fungi, the steps required for septation include formin, septin, and actin localization followed by cell wall synthesis and the completion of septation. rho-4 mutants were unable to form actin rings, showing that RHO-4 is required for actin ring formation. Characterization of strains containing activated alleles of rho-4 showed that RHO-4-GTP is likely to initiate new septum formation in N. crassa.