Actomyosin contractility is regulated by Rho-GTP in cell migration, cytokinesis and morphogenesis in embryo development. Whereas Rho activation by Rho-GTP exchange factor (GEF), RhoGEF2 is well known in actomyosin contractility during cytokinesis at the base of invaginating membranes in Drosophila cellularization, Rho inhibition by RhoGTPase activating proteins (GAP) remains to be studied. We have found that the RhoGAP, GRAF inhibits actomyosin contractility during cellularization. GRAF is enriched at the cleavage furrow tip during actomyosin assembly and initiation of ring constriction. Graf depletion shows increased Rho-GTP, increased Myosin II and ring hyper constriction dependent upon the loss of the RhoGTPase domain. GRAF and RhoGEF2 are present in a balance for appropriate activation of actomyosin ring constriction. RhoGEF2 depletion and abrogation of Myosin II activation in Rho Kinase mutants suppresses the Graf hyper constriction defect. Therefore, GRAF recruitment restricts Rho-GTP levels in a spatiotemporal manner for inhibiting actomyosin contractility during cellularization.