The matrix metalloproteinase MMP-9/gelatinase B is upregulated in angiogenic dysplasias and invasive cancers of the epidermis in a mouse model of multi-stage tumorigenesis elicited by HPV16 oncogenes. Transgenic mice lacking MMP-9 show reduced keratinocyte hyperproliferation at all neoplastic stages and a decreased incidence of invasive tumors. Yet those carcinomas that do arise in the absence of MMP-9 exhibit a greater loss of keratinocyte differentiation, indicative of a more aggressive and higher grade tumor. Notably, MMP-9 is predominantly expressed in neutrophils, macrophages, and mast cells, rather than in oncogene-positive neoplastic cells. Chimeric mice expressing MMP-9 only in cells of hematopoietic origin, produced by bone marrow transplantation, reconstitute the MMP-9-dependent contributions to squamous carcinogenesis. Thus, inflammatory cells can be coconspirators in carcinogenesis.