Retrograde signaling is essential for coordinating the growth of synaptic structures; however, it is not clear how it can lead to modulation of cytoskeletal dynamics and structural changes at presynaptic terminals. We show that loss of retrograde bone morphogenic protein (BMP) signaling at the Drosophila larval neuromuscular junction (NMJ) leads to a significant reduction in levels of Rac GEF Trio and a diminution of transcription at the trio locus. We further find that Trio is required in motor neurons for normal structural growth. Finally, we show that transgenic expression of Trio in motor neurons can partially restore NMJ defects in larvae mutant for BMP signaling. Based on our findings, we propose a model in which a retrograde BMP signal from the muscle modulates GTPase activity through transcriptional regulation of Rac GEF trio, thereby regulating the homeostasis of synaptic growth at the NMJ.