Epithelial polarity and morphogenesis require the careful coordination of signaling and cytoskeletal elements. In this paper, we describe multiple genetic interactions between the apical cytoskeletal protein β(H) and Rac1 signaling in Drosophila: activation of Rac1 signaling by expression of the exchange factor Trio, is strongly enhanced by reducing β(H) levels, and such reductions in β(H) levels alone are shown to cause an increase in GTP-Rac1 levels. In contrast, co-expression of a C-terminal fragment of β(H) (βH33) suppresses the Trio expression phenotype. In addition, sustained expression of βH33 alone in the eye induces a strong dominant phenotype that is similar to the expression of dominant negative Rac1(N17), and this phenotype is also suppressed by the co-expression of Trio or by knockdown of RacGAP50C. We further demonstrate that a loss-of-function allele in pak, a Rac1 effector and negative regulator of β(H)' dominantly suppresses larval lethality arising loss-of-function karst (β(H)) alleles. Furthermore, expression of constitutively active Pak(myr) in the larval salivary gland induces expansion of the apical membrane and destabilization of the apical polarity determinants Crumbs and aPKC. These effects resemble a Rac1 activation phenotype and are suppressed by βH33. Together, our data suggest that apical proteins including β(H) are negatively regulated by Rac1 activation, but that Rac1 signaling is also suppressed by β(H) through its C-terminal domain. Such a system would be bistable with either Rac1 or β(H) predominant. We suggest a model for apical domain maintenance wherein Rac1 down-regulation of β(H) (via Pak) is opposed by β(H)-mediated down-regulation of Rac1 signaling.