Advanced stages of epithelial carcinogenesis involve the loss of intercellular adhesion, but it remains unclear how proteins that regulate alterations in cell-cell and cell-matrix adhesion are deregulated to promote the early stages of cancer development. To address this, a three-dimensional human tissue model that mimics the incipient stages of squamous cell carcinoma (SCC) was used to study how E-cadherin suppression promotes tumor progression in Ras-expressing human keratinocytes. We found that E-cadherin suppression triggered elevated mRNA and protein expression levels of focal adhesion kinase (FAK), and increased FAK and Src activities above the level seen in Ras-expressing E-cadherin-competent keratinocytes. The short hairpin RNA (shRNA)-mediated depletion of FAK and Src restored E-cadherin expression levels by increasing its stability in the membrane, and blocked tumor cell invasion in tissues. Surface transplantation of these tissues to mice resulted in reversion of the tumor phenotype to low-grade tumor islands in contrast to control tissues that manifested an aggressive, high-grade SCC. These findings suggest that the tumor-promoting effect of E-cadherin suppression, a common event in SCC development, is exacerbated by enhanced E-cadherin degradation induced by elevated FAK and Src activities. Furthermore, they imply that targeting FAK or Src in human epithelial cells with neoplastic potential may inhibit the early stages of SCC.