Loss of expression of the type III transforming growth factor-β receptor (TβRIII or betaglycan), a transforming growth factor-β (TGF-β) superfamily co-receptor, is common in human breast cancers. TβRIII suppresses cancer progression in vivo by reducing cancer cell migration and invasion by largely unknown mechanisms. Here, we demonstrate that the cytoplasmic domain of TβRIII is essential for TβRIII-mediated downregulation of migration and invasion in vitro and TβRIII-mediated inhibition of breast cancer progression in vivo. Functionally, the cytoplasmic domain of TβRIII is required to attenuate TGF-β signaling, whereas TβRIII-mediated attenuation of TGF-β signaling is required for TβRIII-mediated inhibition of migration and invasion. Mechanistically, both TbRIII-mediated inhibition of TGF-β signaling and TβRIII-mediated inhibition of invasion occur through the interaction of the cytoplasmic domain of TβRIII with the scaffolding protein GAIP-interacting protein C-terminus (GIPC). Taken together, these studies support a functional role for the TβRIII cytoplasmic domain interacting with GIPC to suppress breast cancer progression.