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With more regulations tackling users' privacy-sensitive data protection in recent years, access to such data has become increasingly restricted and controversial. To exploit the wealth of data generated and located at distributed entities such as mobile phones, a revolutionary decentralized machine learning setting, known as Federated Learning, enables multiple clients located at different geographical locations to collaboratively learn a machine learning model while keeping all their data on-device. However, the scale and decentralization of federated learning present new challenges. Communication between the clients and the server is considered a main bottleneck in the convergence time of federated learning. In this paper, we propose and study Adaptive Federated Dropout (AFD), a novel technique to reduce the communication costs associated with federated learning. It optimizes both server-client communications and computation costs by allowing clients to train locally on a selected subset of the global model. We empirically show that this strategy, combined with existing compression methods, collectively provides up to 57x reduction in convergence time. It also outperforms the state-of-the-art solutions for communication efficiency. Furthermore, it improves model generalization by up to 1.7%.