Rho1p regulates cell integrity by controlling the actin cytoskeleton and cell-wall synthesis. Here, we describe the cloning and characterization of rgf3+, a member of the Rho family of guanine nucleotide exchange factors (Rho GEFs). The rgf3+ gene was cloned by complementation of a mutant (ehs2-1) hypersensitive to drugs that interfere with cell-wall biosynthesis. The rgf3+ gene was found to be essential for cell viability and depletion of Rgf3p afforded phenotypes similar to those obtained following depletion of Rho1p. However, the cell death caused by Rgf3p depletion could be rescued by the presence of 1.2 M sorbitol, whereas depletion of Rho1 was lethal under the same conditions. We show that Rgf3p is a specific Rho1-GEF. The hypersensitivity to drugs affecting the cell wall of the ehs2-1 mutant was suppressed by overexpression of rho1+ but not by any of the other GTPases of the Rho family. Rgf3p interacted with the GDP-bound form of Rho1p and promoted the GDP-GTP exchange. In addition, we show that overexpression of Rgf3p produces multiseptated cells and increases beta-1,3-glucan synthase activity and the amount of cell wall beta-1,3-glucan. Rgf3p localized to the septum and the mRNA level was regulated in a cell-cycle-dependent manner peaking during septation. Our results suggest that Rgf3p acts as a positive activator of Rho1p, probably activating the Rho functions that coordinate cell-wall biosynthesis to maintain cell integrity during septation.