Rho GTPases control fundamental cellular processes and Cdc42 is a well-studied member of the family that controls filopodia formation and cell migration. Although the regulation of Cdc42 activity by nucleotide binding is well documented, the mechanisms driving its proteostasis are not clear. Here, we demonstrate that the highly conserved, RING domain containing E3 ubiquitin ligase XIAP controls the protein stability of Cdc42. XIAP binds to Cdc42 and directly conjugates poly ubiquitin chains to the Lysine 166 of Cdc42 targeting it for proteasomal degradation. Depletion of XIAP led to an increased protein stability and activity of Cdc42 in normal and tumor cells. Consistently, loss of XIAP enhances filopodia formation in a Cdc42-dependent manner and this phenomenon phenocopies EGF stimulation. Further, XIAP depletion promotes lung colonization of tumor cells in mice in a Cdc42-dependent manner. These observations shed molecular insights into ubiquitin-dependent regulation of Cdc42 and that of actin cytoskeleton.