Aberrant regulation of cellular extrusion can promote invasion and metastasis. Here, we identify molecular requirements for early cellular invasion using a premalignant mouse model of pancreatic cancer with conditional knockout of p120 catenin (Ctnnd1). Mice with biallelic loss of p120 catenin progressively develop high-grade pancreatic intraepithelial neoplasia (PanIN) lesions and neoplasia accompanied by prominent acute and chronic inflammatory processes, which is mediated, in part, through NF-κB signaling. Loss of p120 catenin in the context of oncogenic Kras also promotes remarkable apical and basal epithelial cell extrusion. Abundant single epithelial cells exit PanIN epithelium basally, retain epithelial morphology, survive, and display features of malignancy. Similar extrusion defects are observed following p120 catenin knockdown in vitro, and these effects are completely abrogated by the activation of S1P/S1pr2 signaling. In the context of oncogenic Kras, p120 catenin loss significantly reduces expression of genes mediating S1P/S1pr2 signaling in vivo and in vitro, and this effect is mediated at least, in part, through activation of NF-κB. These results provide insight into mechanisms controlling early events in the metastatic process and suggest that p120 catenin and S1P/S1pr2 signaling enhance cancer progression by regulating epithelial cell invasion. Cancer Res; 76(11); 3351-63. ©2016 AACR.