Recent work has shown an increasing appreciation for the importance of the tumor environment, most commonly the overlying stroma. Less emphasis has been placed on the importance of local communication between transformed cells and their neighbors within the epithelium at tumor boundaries. We previously reported a Drosophila model that highlighted the importance of local interactions within the epithelial microenvironment: Src-transformed cells (Csk-deficient) were influenced by their immediate normal neighbors. The result was a consistent change in 'border cells' at the edge of transformed patches including delocalized p120-catenin and E-cadherin as well as invasive migration through the basal lamina. Here we show that the invasive properties of the boundary cells depend on up-regulation of Drosophila matrix metalloproteinase-1 as assessed by promoter activity, protein levels, in situ enzymatic activity, and tests of genetic modifier activity. Further, we provide evidence that these events at tumor borders may be evolutionarily conserved. We detected changes in 'boundary cells' within histological sections of human squamous cell carcinomas that were similar to those observed in Drosophila: both E-cadherin and p120-catenin exhibited normal junctional localization at the centers of the tumors but were reduced or delocalized at the boundary. Further, matrix metalloproteinase-2 was up regulated within these same boundary cells. These results support the view that local cell-cell interactions within the epithelial microenvironment impact tumor invasion and progression.