Helicobacter pylori is the strongest known risk factor for gastric adenocarcinoma, yet only a fraction of infected persons develop cancer. One H. pylori constituent that augments disease risk is the cytotoxin-associated gene (cag) pathogenicity island, which encodes a secretion system that translocates bacterial effector molecules into host cells. Matrix metalloproteinase (MMP)-7, a member of a family of enzymes with tumor-initiating properties, is overexpressed in premalignant and malignant gastric lesions, and H. pylori cag(+) strains selectively increase MMP-7 protein levels in gastric epithelial cells in vitro and in vivo. We now report that H. pylori-mediated mmp-7 induction is transcriptionally regulated via aberrant activation of p120-catenin (p120), a component of adherens junctions. H. pylori increases mmp-7 mRNA levels in a cag- and p120-dependent manner and induces translocation of p120 to the nucleus in vitro and in a novel ex vivo gastric gland culture system. Nuclear translocation of p120 in response to H. pylori relieves Kaiso-mediated transcriptional repression of mmp-7, which is implicated in tumorigenesis. These results indicate that selective and coordinated induction of mmp-7 expression by H. pylori cag(+) isolates may explain in part the augmentation in gastric cancer risk associated with these strains.