Lowe Syndrome is a developmental disorder characterized by eye, kidney, and neurological pathologies, and is caused by mutations in the phosphatidylinositol-5-phosphatase OCRL. OCRL plays diverse roles in endocytic and endolysosomal trafficking, cytokinesis, and ciliogenesis, but it is unclear which of these cellular functions underlie specific patient symptoms. Here, we show that mutation of Drosophila OCRL causes cell-autonomous activation of hemocytes, which are macrophage-like cells of the innate immune system. Among many cell biological defects that we identified in docrl mutant hemocytes, we pinpointed the cause of innate immune cell activation to reduced Rab11-dependent recycling traffic and concomitantly increased Rab7-dependent late endosome traffic. Loss of docrl amplifies multiple immune-relevant signals, including Toll, Jun kinase, and STAT, and leads to Rab11-sensitive mis-sorting and excessive secretion of the Toll ligand Spåtzle. Thus, docrl regulation of endosomal traffic maintains hemocytes in a poised, but quiescent state, suggesting mechanisms by which endosomal misregulation of signaling may contribute to symptoms of Lowe syndrome.