Macrophages that are recruited to the site of implanted biomaterials undergo fusion to form surface-damaging foreign body giant cells. Exposure of peripheral blood monocytes to interleukin-4 can recapitulate the fusion process in vitro. In this study, we used interleukin-4 to induce multinucleation of murine bone marrow-derived macrophages and observed changes in cell shape, including elongation and lamellipodia formation, before fusion. Because cytoskeletal rearrangements are regulated by small GTPases, we examined the effects of inhibitors of Rho kinase (Y-32885) and Rac activation (NSC23766) on fusion. Y-32885 did not prevent cytoskeletal changes or fusion but limited the extent of multinucleation. NSC23766, on the other hand, inhibited lamellipodia formation and fusion in a dose-dependent manner. In addition, we found that in control cells, these changes were preceded by Rac1 activation. However, NSC23766 did not block the uptake of polystyrene microspheres. Likewise, short interfering RNA knockdown of Rac1 limited fusion without limiting phagocytosis. Thus, phagocytosis and fusion can be partially decoupled based on their susceptibility to NSC23766. Furthermore, poly(ethylene-co-vinyl acetate) scaffolds containing NSC23766 attenuated foreign body giant cell formation in vivo. These observations suggest that targeting Rac1 activation could protect biomaterials without compromising the ability of macrophages to perform beneficial phagocytic functions at implantation sites.