Fibroblast activation protein (FAP) is a cell-surface serine protease that acts on various hormones and extracellular matrix components. FAP is highly upregulated in a wide variety of cancers, and is often used as a marker for pro-tumorigenic stroma. It has also been proposed as a molecular target of cancer therapies, and, especially in recent years, a great deal of research has gone into design and testing of diverse FAP-targeted treatments. Yet despite this growing field of research, our knowledge of FAP's basic biology and functional roles in various cancers has lagged behind its use as a tumor-stromal marker. In this review, we summarize and analyze recent advances in understanding the functions of FAP in cancer, most notably its prognostic value in various tumor types, cellular effects on various cell types, and potential as a therapeutic target. We highlight outstanding questions in the field, the answers to which could shape preclinical and clinical studies of FAP.