Podosomes are dynamic actin-rich adhesion plasma membrane microdomains endowed with extracellular matrix-degrading activities. In aortic endothelial cells, podosomes are induced by transforming growth factor β (TGF-β), but how this occurs is largely unknown. It is thought that, in endothelial cells, podosomes play a role in vessel remodeling and/or in breaching anatomical barriers. We demonstrate here that, in bovine aortic endothelial cells, that the Cdc42-specific guanine exchange factor (GEF) Fgd1 is expressed and regulated by TGF-β to induce Cdc42-dependent podosome assembly. Within 15 min of TGF-β stimulation, Fgd1, but none of the other tested Cdc42 GEFs, undergoes tyrosine phosphorylation, associates with Cdc42, and translocates to the subcortical cytoskeleton via a cortactin-dependent mechanism. Small interfering RNA-mediated Fgd1 knockdown inhibits TGF-β-induced Cdc42 activation. Fgd1 depletion also reduces podosome formation and associated matrix degradation and these defects are rescued by reexpression of Fgd1. Although overexpression of Fgd1 does not promote podosome formation per se, it enhances TGF-β-induced matrix degradation. Our results identify Fgd1 as a TGF-β-regulated GEF and, as such, the first GEF to be involved in the process of cytokine-induced podosome formation. Our findings reveal the involvement of Fgd1 in endothelial cell biology and open up new avenues to study its role in vascular pathophysiology.