Increased Src activity, often associated with tumorigenesis, leads to the formation of invasive adhesions termed podosomes. Podosome formation requires the function of Rho family guanosine triphosphatases and reorganization of the actin cytoskeleton. In addition, Src induces changes in gene expression required for transformation, in part by activating mitogen-activated protein kinase (MAPK) signaling pathways. We sought to determine whether MAPK signaling regulates podosome formation. Unlike extracellular signal-regulated kinase 1/2 (ERK1/2), ERK5 is constitutively activated in Src-transformed fibroblasts. ERK5-deficient cells expressing v-Src exhibited increased RhoA activation and signaling, which lead to cellular retraction and an inability to form podosomes or induce invasion. Addition of the Rho-kinase inhibitor Y27632 to ERK5-deficient cells expressing v-Src led to cellular extension and restored podosome formation. In Src-transformed cells, ERK5 induced the expression of a Rho GTPase-activating protein (RhoGAP), RhoGAP7/DLC-1, via activation of the transcription factor myocyte enhancing factor 2C, and RhoGAP7 expression restored podosome formation in ERK5-deficient cells. We conclude that ERK5 promotes Src-induced podosome formation by inducing RhoGAP7 and thereby limiting Rho activation.