At the initial stage of carcinogenesis, transformation occurs in a single cell within an epithelial sheet. However, it remains unknown what happens at the boundary between normal and transformed cells. Using Madin-Darby canine kidney (MDCK) cells transformed with temperature-sensitive v-Src, we have examined the interface between normal and Src-transformed epithelial cells. We show that Src-transformed cells are apically extruded when surrounded by normal cells, but not when Src cells alone are cultured, suggesting that apical extrusion occurs in a cell-context-dependent manner. We also observe apical extrusion of Src-transformed cells in the enveloping layer of zebrafish gastrula embryos. When Src-transformed MDCK cells are surrounded by normal MDCK cells, myosin-II and focal adhesion kinase (FAK) are activated in Src cells, which further activate downstream mitogen-activated protein kinase (MAPK). Importantly, activation of these signalling pathways depends on the presence of surrounding normal cells and plays a crucial role in apical extrusion of Src cells. Collectively, these results indicate that interaction with surrounding normal epithelial cells influences the signalling pathways and behaviour of Src-transformed cells.