Cdc42 recruits Par-6-aPKC to establish cell polarity from worms to mammals. Although Cdc42 is reported to have no function in Drosophila neuroblasts, a model for cell polarity and asymmetric cell division, we show that Cdc42 colocalizes with Par-6-aPKC at the apical cortex in a Bazooka-dependent manner, and is required for Par-6-aPKC localization. Loss of Cdc42 disrupts neuroblast polarity: cdc42 mutant neuroblasts have cytoplasmic Par-6-aPKC, and this phenotype is mimicked by neuroblast-specific expression of a dominant-negative Cdc42 protein or a Par-6 protein that lacks Cdc42-binding ability. Conversely, expression of constitutively active Cdc42 leads to ectopic Par-6-aPKC localization and corresponding cell polarity defects. Bazooka remains apically enriched in cdc42 mutants. Robust Cdc42 localization requires Par-6, indicating the presence of feedback in this pathway. In addition to regulating Par-6-aPKC localization, Cdc42 increases aPKC activity by relieving Par-6 inhibition. We conclude that Cdc42 regulates aPKC localization and activity downstream of Bazooka, thereby directing neuroblast cell polarity and asymmetric cell division.