Recent studies have shown the small GTPases, Rac1, Rho, and CDC42, to have a role in axon guidance. To assess their participation in synapse assembly and function we have expressed various forms of Drac1 in the giant fiber system of Drosophila. Overexpression of wild-type Drac1 in the giant fiber (GF) lead to a disruption in axonal morphology; axons often terminate prematurely in a large swelling in the target area but lack the normal lateral bend where the synapse with the jump motor neuron would normally be found. Electrophysiological assays revealed longer latencies and lowering following frequencies indicating defects in the synapse between the GF and the tergotrochanteral motor neuron (TTMn). Thickened abnormal GF dendrites were also observed in the brain. Overexpression of the dominant-negative form of Drac1, (N17), resulted in axons that produced extra branches in the second thoracic neuromere (T2); however, the synaptic connection to the TTMn was present and functioned normally. Conversely, expression of the constitutively active form, Drac1(V12), resulted in a complete lack of neurite outgrowth and this was also seen with overexpression of Dcdc42(V12). In the absence of a GF, these flies showed no response in the jump (TTM) or flight (DLM) muscles upon brain stimulation. Taken together these results show that the balance of actin polymerization and depolymerization determines local process outgrowth and thereby synapse structure and function.