Transforming growth factor β (TGF-β)–stimulated epithelial–mesenchymal transition (EMT) is an important developmental process that has also been implicated in increased cell invasion and metastatic potential of cancer cells. Expression of the focal adhesion protein Hic-5 has been shown to be up-regulated in epithelial cells in response to TGF-β. Herein, we demonstrate that TGF-β–induced Hic-5 up-regulation or ectopic expression of Hic-5 in normal MCF10A cells promoted increased extracellular matrix degradation and invasion through the formation of invadopodia. Hic-5 was tyrosine phosphorylated in an Src-dependent manner after TGF-β stimulation, and inhibition of Src activity or overexpression of a Y38/60F nonphosphorylatable mutant of Hic-5 inhibited matrix degradation and invasion. RhoC, but not RhoA, was also required for TGF-β– and Hic-5–induced matrix degradation. Hic-5 also induced matrix degradation, cell migration, and invasion in the absence of TGF-β via Rac1 regulation of p38 MAPK. These data identify Hic-5 as a critical mediator of TGF-β–stimulated invadopodia formation, cell migration, and invasion.