Invadopodia are proteolytically active membrane protrusions that extend from the ventral surface of invasive tumoral cells grown on an extracellular matrix (ECM). The core machinery controlling invadopodia biogenesis is regulated by the Rho GTPase Cdc42. To understand the upstream events regulating invadopodia biogenesis, we investigated the role of Fgd1, a Cdc42-specific guanine nucleotide exchange factor. Loss of Fgd1 causes the rare inherited human developmental disease faciogenital dysplasia. Here, we show that Fgd1 is required for invadopodia biogenesis and ECM degradation in an invasive cell model and functions by modulation of Cdc42 activation. We also find that Fgd1 is expressed in human prostate and breast cancer as opposed to normal tissue and that expression levels matched tumor aggressiveness. Our findings suggest a central role for Fgd1 in the focal degradation of the ECM in vitro and, for the first time, show a connection between Fgd1 and cancer progression, proposing that it might function during tumorigenesis.