Human squamous cell carcinomas (SCC) frequently express elevated levels of epidermal growth factor receptor (EGFR). EGFR overexpression in SCC-derived cell lines correlates with their ability to invade in an in vitro invasion assay in response to EGF, whereas benign epidermal cells, which express low levels of EGFR, do not invade. EGF-induced invasion of SCC-derived A431 cells is inhibited by sustained expression of the dominant negative mutant of c-Jun, TAM67, suggesting a role for the transcription factor AP-1 (activator protein-1) in regulating invasion. Significantly, we establish that sustained TAM67 expression inhibits growth factor-induced cell motility and the reorganization of the cytoskeleton and cell-shape changes essential for this process: TAM67 expression inhibits EGF-induced membrane ruffling, lamellipodia formation, cortical actin polymerization and cell rounding. Introduction of a dominant negative mutant of Rac and of the Rho inhibitor C3 transferase into A431 cells indicates that EGF-induced membrane ruffling and lamellipodia formation are regulated by Rac, whereas EGF-induced cortical actin polymerization and cell rounding are controlled by Rho. Constitutively activated mutants of Rac or Rho introduced into A431 or A431 cells expressing TAM67 (TA cells) induce equivalent actin cytoskeletal rearrangements, suggesting that the effector pathways downstream of Rac and Rho required for these responses are unimpaired by sustained TAM67 expression. However, EGF-induced translocation of Rac to the cell membrane, which is associated with its activation, is defective in TA cells. Our data establish a novel link between AP-1 activity and EGFR activation of Rac and Rho, which in turn mediate the actin cytoskeletal rearrangements required for cell motility and invasion.