The small GTPase Cdc42 is a key regulator of polarity, but little is known in mammals about its spatial regulation and the relevance of spatial Cdc42 pools for polarity. Here we report the identification of a GM130-RasGRF complex as a regulator of Cdc42 at the Golgi. Silencing GM130 results in RasGRF-dependent inhibition of the Golgi pool of Cdc42, but does not affect Cdc42 at the cell surface. Furthermore, active Cdc42 at the Golgi is important to sustain asymmetric front-rear Cdc42-GTP distribution in directionally migrating cells. Concurrent to Cdc42 inhibition, silencing GM130 also results in RasGRF-dependent Ras-ERK pathway activation. Moreover, depletion of GM130 is sufficient to induce E-cadherin downregulation, indicative of a loss in cell polarity and epithelial identity. Accordingly, GM130 expression is frequently lost in colorectal and breast cancer patients. These findings establish a previously unrecognized role for a GM130-RasGRF-Cdc42 connection in regulating polarity and tumorigenesis.