Generation and maintenance of proper lumen size is important for tubular organ function. We report on a novel role for the Drosophila Rho1 GTPase in control of salivary gland lumen size through regulation of cell rearrangement, apical domain elongation and cell shape change. We show that Rho1 controls cell rearrangement and apical domain elongation by promoting actin polymerization and regulating F-actin distribution at the apical and basolateral membranes through Rho kinase. Loss of Rho1 resulted in reduction of F-actin at the basolateral membrane and enrichment of apical F-actin, the latter accompanied by enrichment of apical phosphorylated Moesin. Reducing cofilin levels in Rho1 mutant salivary gland cells restored proper distribution of F-actin and phosphorylated Moesin and rescued the cell rearrangement and apical domain elongation defects of Rho1 mutant glands. In support of a role for Rho1-dependent actin polymerization in regulation of gland lumen size, loss of profilin phenocopied the Rho1 lumen size defects to a large extent. We also show that Ribbon, a BTB domain-containing transcription factor functions with Rho1 in limiting apical phosphorylated Moesin for apical domain elongation. Our studies reveal a novel mechanism for controlling salivary gland lumen size, namely through Rho1-dependent actin polymerization and distribution and downregulation of apical phosphorylated Moesin.