Members of the fibroblast growth factor (FGF) family and the FGF receptors (FGFRs) have been implicated in mediating various aspects of mammary gland development and transformation. To elucidate the molecular mechanisms of FGFR1 action in a context that mimics polarized epithelial cells, we have developed an in vitro three-dimensional HC11 mouse mammary epithelial cell culture model expressing a drug-inducible FGFR1 (iFGFR1). Using this conditional model, iFGFR1 activation in these growth-arrested and polarized mammary acini initially led to reinitiation of cell proliferation, increased survival of luminal cells, and loss of cell polarity, resulting in the disruption of acinar structures characterized by the absence of an empty lumen. iFGFR1 activation also resulted in a gain of invasive properties and the induction of matrix metalloproteinase 3 (MMP-3), causing the cleavage of E-cadherin and increased expression of smooth muscle actin and vimentin. The addition of a pan MMP inhibitor abolished these phenotypes but did not prevent the effects of iFGFR1 on cell proliferation or survival.