Ras proteins activate Raf and PI-3 kinases, as well as exchange factors for RalA and RalB GTPases. Many previous studies have reported that the Ral-signaling cascade contributes positively to Ras-mediated oncogenesis. Here, using a bioengineered tissue model of early steps in Ras-induced human squamous cell carcinoma of the skin, we found the opposite. Conversion of Ras-expressing keratinocytes from a premalignant to malignant state induced by decreasing E-cadherin function was associated with and required an approximately two to threefold decrease in RalA expression. Moreover, direct knockdown of RalA to a similar degree by shRNA expression in these cells reduced E-cadherin levels and also induced progression to a malignant phenotype. Knockdown of the Ral effector, Exo84, mimicked the effects of decreasing RalA levels in these engineered tissues. These phenomena can be explained by our finding that the stability of E-cadherin in Ras-expressing keratinocytes depends upon this RalA signaling cascade. These results imply that an important component of the early stages in squamous carcinoma progression may be a modest decrease in RalA gene expression that magnifies the effects of decreased E-cadherin expression by promoting its degradation.