Rho-type GTPases are key regulators that control eukaryotic cell polarity, but their role in fungal morphogenesis is only beginning to emerge. In this study, we investigate the role of the CDC-42 - RAC - CDC-24 module in Neurospora crassa. rac and cdc-42 deletion mutants are viable, but generate highly compact colonies with severe morphological defects. Double mutants carrying conditional and loss of function alleles of rac and cdc-42 are lethal, indicating that both GTPases share at least one common essential function. The defects of the GTPase mutants are phenocopied by deletion and conditional alleles of the guanine exchange factor (GEF) cdc-24, and in vitro GDP-GTP exchange assays identify CDC-24 as specific GEF for both CDC-42 and RAC. In vivo confocal microscopy shows that this module is organized as membrane-associated cap that covers the hyphal apex. However, the specific localization patterns of the three proteins are distinct, indicating different functions of RAC and CDC-42 within the hyphal tip. CDC-42 localized as confined apical membrane-associated crescent, while RAC labeled a membrane-associated ring excluding the region labeled by CDC42. The GEF CDC-24 occupied a strategic position, localizing as broad apical membrane-associated crescent and in the apical cytosol excluding the Spitzenkörper. RAC and CDC-42 also display distinct localization patterns during branch initiation and germ tube formation, with CDC-42 accumulating at the plasma membrane before RAC. Together with the distinct cellular defects of rac and cdc-42 mutants, these localizations suggest that CDC-42 is more important for polarity establishment, while the primary function of RAC may be maintaining polarity. In summary, this study identifies CDC-24 as essential regulator for RAC and CDC-42 that have common and distinct functions during polarity establishment and maintenance of cell polarity in N. crassa.