Overexpression of membrane-type-1 matrix metalloproteinase (MT1-MMP) in tumor cells has previously been shown to enhance tumor growth and metastasis. To establish if MT1-MMP is also able to confer tumorigenicity on nonmalignant epithelial cells, we transfected human MT1-MMP cDNA into Madin-Darby canine kidney (MDCK) cells expressing a tetracycline-repressible transactivator. Induction of MT1-MMP in the absence of doxycycline (Dox) was associated with activation of exogenous MMP-2 as well as with formation of large cysts and increased invasiveness in collagen matrices. Transfected cells were inoculated subcutaneously into two groups of nude mice, one of which received Dox to inhibit expression of MT1-MMP. Formation of tumor xenografts was observed in 11 of 17 mice maintained without Dox, but only in two of nine mice that received Dox (P<0.05). The xenografts were composed of tubular structures interspersed within a highly cellular stroma. The epithelial cells delimiting the lumen were polarized, as indicated by the basolateral distribution of Na,K-ATPase. Despite their differentiated appearance, the tumors lacked a well-defined boundary, and epithelial tubules invaded adjacent muscular layers. These results demonstrate that conditional expression of MT1-MMP in nonmalignant MDCK epithelial cells is by itself sufficient to drive formation of invasive tumors.