Rho-4 mutants of the filamentous fungus Neurospora crassa lack septa and asexual spores (conidia) and grow slowly. In this report, localization of green fluorescent protein-tagged RHO-4 is used to elucidate the differences in factors controlling RHO-4 localization during vegetative growth versus asexual development. RHO-4 forms a ring at incipient vegetative septation sites that constricts with the formation of the septum toward the septal pore; RHO-4 persists around the septal pore after septum completion. During the formation of conidia, RHO-4 localizes to the primary septum but subsequently is relocalized to the cytoplasm after the placement of the secondary septum. Cytoplasmic localization and inactivation of RHO-4 are mediated by a direct physical interaction with RDI-1, a RHO guanosine nucleotide dissociation inhibitor. Inappropriate activation of the cyclic AMP-dependent protein kinase A pathway during vegetative growth causes mislocalization of RHO-4 away from septa to the cytoplasm, a process which was dependent upon RDI-1. An adenylate cyclase cr-1 mutant partially suppresses the aconidial defect of rho-4 mutants but only rarely suppresses the vegetative septation defect, indicating that conidial septation is negatively regulated by CR-1. These data highlight the differences in the regulation of septation during conidiation versus vegetative septation in filamentous fungi.