Recurrent and new tumors, attributed in part to lateral invasion, are frequent in squamous cell carcinomas and lead to poor survival. We identified a mechanism by which cancer subverts adjacent histologically normal epithelium to enable small clusters of cancer cells to burrow undetected under adjacent histologically normal epithelium. We show that suppression of DMBT1 within cancer promotes aggressive invasion and metastasis in vivo and is associated with metastasis in patients. Cancer cells via TGFβ1 and TNFα also suppress DMBT1 in adjacent histologically normal epithelium, thereby subverting it to promote invasion of a small population of tumor cells. The sufficiency of DMBT1 in this process is demonstrated by significantly higher satellite tumor nests in Dmbt1−/− compared with wild-type mice. Moreover, in patients, invasion of small tumor nests under adjacent histologically normal epithelium is associated with increased risk for recurrence and shorter disease-free survival. This study demonstrates a crucial role of adjacent histologically normal epithelium in invasion and its important role in the tumor microenvironment and opens new possibilities for therapeutic strategies that reduce tumor recurrence.