S. flexneri is an important human pathogen that causes bacillary dysentery. During infection, S. flexneri invades colonic epithelial cells, hijacks the host cell cytoskeleton to move in the cytosol of infected cells, and spreads from cell to cell through formation of membrane protrusions that project into adjacent cells and resolve into double membrane vacuoles (DMVs). S. flexneri cell-to-cell spread requires the integrity of the bacterial type three secretion system (T3SS). However, the exact role of the T3SS effector proteins in the dissemination process remains poorly understood. Here, we investigated the role of the T3SS effector protein IpgB1 in S. flexneri dissemination. IpgB1 was previously characterized as a guanine nucleotide exchange factor (GEF) that contributes to invasion. In addition to the invasion defect, we showed that the ipgB1 mutant formed smaller infection foci in HT-29 cells. Complementation of this phenotype required the GEF activity of IpgB1. Using live confocal microscopy, we showed that the ipgB1 mutant is specifically impaired in DMV escape. Depletion of Rac1, the host cell target of IpgB1 during invasion, as well as pharmacological inhibition of Rac1 signaling, reduced cell-to-cell spread and DMV escape. In a targeted siRNA screen, we uncovered that RhoA depletion restored ipgB1 cell-to-cell spread and DMV escape, revealing a critical role for the IpgB1-Rac1 axis in antagonizing RhoA-mediated restriction of DMV escape. Using an infant rabbit model of shigellosis, we showed that the ipgB1 mutant formed fewer and smaller infection foci in the colon of infected animals, which correlated with attenuated symptoms of disease, including epithelial fenestration and bloody diarrhea. Our results demonstrate that, in addition to its role during invasion, IpgB1 modulates Rho family small GTPase signaling to promote cell-to-cell spread, DMV escape, and S. flexneri pathogenesis.