Mutations in the FGD1 gene are responsible for the X-linked disorder known as faciogenital dysplasia (FGDY). FGD1 encodes a guanine nucleotide exchange factor that specifically activates the GTPase Cdc42. In turn, Cdc42 is an important regulator of membrane trafficking, although little is known about FGD1 involvement in this process. During development, FGD1 is highly expressed during bone growth and mineralization, and therefore a lack of the functional protein leads to a severe phenotype. Whether the secretion of proteins, which is a process essential for bone formation, is altered by mutations in FGD1 is of great interest. We initially show here that FGD1 is preferentially associated with the trans-Golgi network (TGN), suggesting its involvement in export of proteins from the Golgi. Indeed, expression of a dominant-negative FGD1 mutant and RNA interference of FGD1 both resulted in a reduction in post-Golgi transport of various cargoes (including bone-specific proteins in osteoblasts). Live-cell imaging reveals that formation of post-Golgi transport intermediates directed to the cell surface is inhibited in FGD1-deficient cells, apparently due to an impairment of TGN membrane extension along microtubules. These effects depend on FGD1 regulation of Cdc42 activation and its association with the Golgi membranes, and they may contribute to FGDY pathogenesis.