The phenotypic switching called epithelial-to-mesenchymal transition is frequently associated with epithelial tumor cell progression from a comparatively benign to an aggressive, invasive malignancy. Coincident with the emergence of such cellular plasticity is an altered response to transforming growth factor-beta (TGF-beta) as well as epidermal growth factor (EGF) receptor amplification. TGF-beta in the tumor microenvironment promotes invasive traits largely through reprogramming gene expression, which paradoxically supports matrix-disruptive as well as stabilizing processes. ras-transformed HaCaT II-4 keratinocytes undergo phenotypic changes typical of epithelial-to-mesenchymal transition, acquire a collagenolytic phenotype, and effectively invade collagen type 1 gels as a consequence of TGF-beta1 + EGF stimulation in a three-dimensional physiologically relevant model system that monitors collagen remodeling. Enhanced collagen degradation was coupled to a significant increase in matrix metalloproteinase (MMP)-10 expression and involved a proteolytic axis composed of plasmin, MMP-10, and MMP-1. Neutralization of any one component in this cascade inhibited collagen gel lysis. Similarly, addition of plasminogen activator inhibitor type 1 (SERPINE1) blocked collagen degradation as well as the conversion of both proMMP-10 and proMMP-1 to their catalytically active forms. This study therefore identifies an important mechanism in TGF-beta1 + EGF-initiated collagen remodeling by transformed human keratinocytes and proposes a crucial upstream role for plasminogen activator inhibitor type 1-dependent regulation in this event.