Our previous studies of human basal cell carcinomas (BCC) revealed increased skin collagenase in vivo. Immunocytochemically the collagenase was localized to adjacent stroma, not to the tumor cells. When grown in culture, skin fibroblasts derived from tumor stroma showed a 3- to 4-fold increase in collagenase for the first 10-14 mean population doublings, after which collagenase expression reverted to control levels. These studies suggested that tumors stimulated adjacent fibroblasts to produce more collagenase. In the present study we sought direct evidence for epithelial-stromal interaction in this neoplasm. Under dissecting microscopy tumor islands were freed of stroma, homogenized, sonicated, and centrifuged to remove insoluble tissue. Tumor extracts were incubated with monolayer cultures of normal human skin fibroblasts to assess their effect on collagenase synthesis in these target cells. Culturing the fibroblasts for 24 h in the presence of individual BCC extracts resulted in a 1.6- to 3-fold increase in trypsin-activatable collagenase in the culture medium. This was paralleled by an equal increase in immunoreactive protein, suggesting enhanced enzyme synthesis. There was no change in the activity per immunoreactive protein, indicating a catalytically unaltered enzyme. Gel filtration of pooled BCC extracts showed that the stimulatory activity was contained in eluent fractions of Mr approximately 19Kd. These data suggest that BCCs elaborate a macromolecular cytokine that induces collagenase synthesis in skin fibroblasts and emphasize the importance of epithelial-stromal interactions in cutaneous tumor invasion.