Small GTPase Ras homologue enriched in brain (RHEB) binds and activates the key metabolic regulator mTORC1, which has an important role in cancer cells, but the role of RHEB in cancer pathogenesis has not been shown. By performing a meta-analysis of published cancer cytogenetic and transcriptome databases, we defined a gain of chromosome 7q36.1-q36.3 containing the RHEB locus, an overexpression of RHEB mRNA in several different carcinoma histotypes, and an association between RHEB upregulation and poor prognosis in breast and head and neck cancers. To model gain of function in epithelial malignancy, we targeted Rheb expression to murine basal keratinocytes of transgenic mice at levels similar to those that occur in human squamous cancer cell lines. Juvenile transgenic epidermis displayed constitutive mTORC1 pathway activation, elevated cyclin D1 protein, and diffuse skin hyperplasia. Skin tumors subsequently developed with concomitant stromal angio-inflammatory foci, evidencing induction of an epidermal hypoxia-inducible factor-1 transcriptional program, and paracrine feed-forward activation of the interleukin-6–signal transducer and activator of transcription 3 pathway. Rheb-induced tumor persistence and neoplastic molecular alterations were mTORC1 dependent. Rheb markedly sensitized transgenic epidermis to squamous carcinoma induction following a single dose of Ras-activating carcinogen 7,12-dimethylbenz(a)anthracene. Our findings offer direct evidence that RHEB facilitates multistage carcinogenesis through induction of multiple oncogenic mechanisms, perhaps contributing to the poor prognosis of patients with cancers overexpressing RHEB. Cancer Res; 70(8); 3287–98. ©2010 AACR.