Plakophilin3 (PKP3) loss results in increased transformation in multiple cell lines in vitro and increased tumor formation in vivo. A microarray analysis performed in the PKP3 knockdown clones, identified an inflammation associated gene signature in cell lines derived from stratified epithelia as opposed to cell lines derived from simple epithelia. However, in contrast to the inflammation associated gene signature, the expression of MMP7 was increased upon PKP3 knockdown in all the cell lines tested. Using vector driven RNA interference, it was demonstrated that MMP7 was required for in-vitro cell migration and invasion and tumor formation in vivo. The increase in MMP7 levels was due to the increase in levels of the Phosphatase of Regenerating Liver3 (PRL3), which is observed upon PKP3 loss. The results suggest that MMP7 over-expression may be one of the mechanisms by which PKP3 loss leads to increased cell invasion and tumor formation.