p120-catenin (p120ctn) interacts with E-cadherin, but to our knowledge, no formal proof that p120ctn functions as a bona fide tumor suppressor gene has emerged to date. We report herein that p120ctn loss leads to tumor development in mice. We have generated a conditional knockout model of p120ctn whereby mice develop preneoplastic and neoplastic lesions in the oral cavity, esophagus, and squamous forestomach. Tumor-derived cells secrete granulocyte macrophage colony-stimulating factor (GM-CSF), macrophage colony-stimulating factor (M-CSF), monocyte chemotactic protein-1 (MCP-1), and tumor necrosis factor-α (TNFα). The tumors contain significant desmoplasia and immune cell infiltration. Immature myeloid cells comprise a significant percentage of the immune cells present and likely participate in fostering a favorable tumor microenvironment, including the activation of fibroblasts.