The ability of fungi to generate polarized cells with a variety of shapes likely reflects precise temporal and spatial control over the formation of polarity axes. The bud site selection system of Saccharomyces cerevisiae represents the best-understood example of such a morphogenetic regulatory system. However, the extent to which this system is conserved in the highly polarized filamentous fungi remains unknown. Here, we describe the functional characterization and localization of the Aspergillus nidulans homolog of the axial bud site marker Bud3. Our results show that AnBud3 is not required for polarized hyphal growth per se, but is involved in septum formation. In particular, our genetic and biochemical evidence implicates AnBud3 as a guanine nucleotide exchange factor for the GTPase Rho4. Additional results suggest that the AnBud3-Rho4 module acts downstream of the septation initiation network to mediate recruitment of the formin SepA to the site of contractile actin ring assembly. Our observations provide new insight into the signaling pathways that regulate septum formation in filamentous fungi.