Abnormalities in the expression and signaling pathways downstream of the epidermal growth factor receptor (EGFR) contribute to malignant transformation in human cancers, including those of the cutaneous epithelium. Accordingly, novel agents such as the EGFR tyrosine kinase inhibitor ZD1839 (Iressa), are promising, biologically based treatments that are currently in preclinical and clinical development. The process of tumor progression requires, among other steps, increased transformation, directional migration, and enhanced cell survival. This study explored the effect of ZD1839 on the stimulation of p42/44 mitogen-activated protein kinase (MAPK) and p21-activated kinase 1 (Pak1), which are vital for transformation, directional motility, and cell survival, using immortalized keratinocytes (HaCaT cells) and cutaneous squamous cell carcinoma cells. The EGFR and a number of effector kinases (mitogen-activated protein extracellular signal-regulated kinase kinase 1 and 2, MAPK, Pak1, p38, c-JunNH(2)-terminal kinase and extracellular signal-regulated kinase 1) and cell survival proteins (AKT, FKHR, and c-Src) showed constitutive pathway activation in HaCaT and cutaneous squamous cell carcinoma cells. ZD1839 effectively inhibited EGFR and MAPK activation and Pak1 activity in exponentially growing cancer cells. ZD1839 also suppressed EGF-induced stimulation of EGFR autophosphorylation on Y1086 and Y1068, MAPK phosphorylation on T402 and Y404, and Pak1 activity in a dose-dependent manner. In addition, ZD1839 blocked EGF-induced cytoskeleton remodeling, cell growth, and in vitro invasiveness of cancer cells and induced a differentiated squamous cell phenotype. These studies suggest that the EGFR-tyrosine kinase inhibitor ZD1839 may cause potent inhibition of the EGFR, MAPK, and Pak1 pathways, resulting in attenuation of transformed cell phenotypes and induced differentiation in human cancer cells deregulated in these growth factor receptor pathways.