Cancer cells form actin-rich protrusions called invadopodia that can degrade the extracellular matrix and facilitate tumor invasion and intravasation. Invadopodia formation is regulated by Rho GTPases; however, the molecular mechanisms controlling Rho GTPase signaling at invadopodia are poorly understood. Here, we have identified ARHGAP17, a Cdc42-specific RhoGAP, as a key regulator of invadopodia in breast cancer cells. Using a combination of fixed and live cell imaging, and a Cdc42 sensor optimized for mammalian cells, we have defined a novel ARHGAP17-mediated signaling pathway that controls the spatial and temporal regulation of Cdc42 activity during invadopodia turnover. During assembly, ARHGAP17 localizes to the invadopodia adhesion ring where it restricts the activity of Cdc42 to the invadopodia core. Later, at the start of invadopodia disassembly, ARHGAP17 moves to the core where it inactivates Cdc42 to promote the disassembly of invadopodia in a process that is mediated by its interaction with the Cdc42 effector CIP4. Our results show that ARHGAP17 coordinates when and where Cdc42 is activated during invadopodia assembly and controls the disassembly by terminating the signal.