PA2.26 antigen is a small mucin-type transmembrane glycoprotein induced in mouse epidermal keratinocytes during carcinogenesis. It is located at plasma membrane projections, such as microvilli and ruffles, where it interacts with the actin cytoskeleton. Previous studies revealed that ectopic expression of PA2.26 in epidermal MCA3D keratinocytes induces cell surface extensions and increased motility. Here, we show that PA2.26-expressing MCA3D (3D2.26) cell transfectants undergo a phenotypic conversion linked to the acquisition of malignant characteristics. The 3D2.26 cells down-regulate basal keratin K14 and up-regulate vimentin and keratin K8 expression. Immunofluorescence analysis in 3D2.26 cell cultures showed loss of cortical actin filaments and destabilization of adherens junctions mediated by E- and P-cadherin, although both cadherin mRNAs were expressed in the transfectants. When the cadherin protein levels were analyzed in Western blots, no P-cadherin protein or smaller polypeptide E-cadherin forms were detected, suggesting that E- and P-cadherin synthesized in 3D2.26 cells was unstable and proteolytically degraded. Transplantation of 3D2.26 cells into athymic nude mice induced tumors, whereas MCA3D cells and control (3DN) transfectants were not tumorigenic after 72 days postinjection. The phenotype of the tumors was undifferentiated, with mixed regions exhibiting a glandular differentiation pattern in which the presence of numerous surface microvilli was observed at the ultrastructural level. Interestingly, PA2.26 antigen was highly expressed in these microvillous cell surfaces. Tumor cells were vimentin- and K8-positive and showed an aberrant pattern of E-cadherin protein expression in which large cytoplasmic aggregates were found close to the nucleus. Infiltration of tumor cells into lymphatic vessels and the presence of frequent regional lymph node metastases were also observed in the tumors. These results indicate that expression of PA2.26 antigen in premalignant keratinocytes induces a fully transformed and metastatic phenotype, and they suggest an involvement of PA2.26 in malignant progression.