During development, small RhoGTPases control the precise cell shape changes and movements that underlie morphogenesis. Their activity must be tightly regulated in time and space, but little is known about how Rho regulators (RhoGEFs and RhoGAPs) perform this function in the embryo. Taking advantage of a new probe that allows the visualisation of small RhoGTPase activity in Drosophila, we present evidence that Rho1 is apically activated and essential for epithelial cell invagination, a common morphogenetic movement during embryogenesis. In the posterior spiracles of the fly embryo, this asymmetric activation is achieved by at least two mechanisms: the apical enrichment of Rho1; and the opposing distribution of Rho activators and inhibitors to distinct compartments of the cell membrane. At least two Rho1 activators, RhoGEF2 and RhoGEF64C are localised apically, whereas the Rho inhibitor RhoGAP Cv-c localises at the basolateral membrane. Furthermore, the mRNA of RhoGEF64C is also apically enriched, depending on signals present within its open reading frame, suggesting that apical transport of RhoGEF mRNA followed by local translation is a mechanism to spatially restrict Rho1 activity during epithelial cell invagination.