Rho family guanosine triphosphatase (GTPase) 3 (Rnd3), a member of the small Rho GTPase family, is involved in the regulation of cell actin cytoskeleton dynamics, cell migration, and proliferation through the Rho kinase-dependent signaling pathway. We report a role of Rnd3 in the pathogenesis of hydrocephalus disorder. Mice with Rnd3 genetic deletion developed severe obstructive hydrocephalus with enlargement of the lateral and third ventricles, but not of the fourth ventricles. The cerebral aqueducts in Rnd3-null mice were partially or completely blocked by the overgrowth of ependymal epithelia. We examined the molecular mechanism contributing to this Rnd3-deficiency–mediated hydrocephalus and found that Rnd3 is a regulator of Notch signaling. Rnd3 deficiency, through either gene deletion or siRNA knockdown, resulted in a decrease in Notch intracellular domain (NICD) protein degradation. However, there was no correlated change in mRNA change, which in turn led to an increase in NICD protein levels. Immunoprecipitation analysis demonstrated that Rnd3 and NICD physically interacted, and that down-regulation of Rnd3 attenuated NICD protein ubiquitination. This eventually enhanced Notch signaling activity and promoted aberrant growth of aqueduct ependymal cells, resulting in aqueduct stenosis and the development of congenital hydrocephalus. Inhibition of Notch activity rescued the hydrocephalus disorder in the mutant animals.