Membrane type 1-matrix metalloproteinase (MT1-MMP, MMP14), which is associated with extracellular matrix (ECM) breakdown in squamous cell carcinoma (SCC), promotes tumor formation and epithelial-mesenchymal transition. However, in this report we demonstrate that MT1-MMP, by cleaving the underlying ECM, causes cellular aggregation of keratinocytes and SCC cells. Treatment with an MMP inhibitor abrogated MT1-MMP-induced phenotypic changes, but decreasing E-cadherin expression did not affect MT1-MMP-induced cellular aggregation. As ROCK1/2 can regulate cell-cell and cell-ECM interaction, we examined its role in mediating MT1-MMP-induced phenotypic changes. Blocking ROCK1/2 expression or activity abrogated the cellular aggregation resulting from MT1-MMP expression. Additionally, blocking Rho and non-muscle myosin attenuated MT1-MMP-induced phenotypic changes. Moreover, SCC cells expressing only the catalytically active MT1-MMP protein demonstrated increased cellular aggregation and increased myosin II activity in vivo when injected subcutaneously into nude mice. Together, these results demonstrate that expression of MT1-MMP may be anti-tumorigenic in keratinocytes by promoting cellular aggregation.