Progression elevated gene-3 (PEG-3) is a novel rodent gene, identified and cloned by subtraction hybridization, that associates with transformation progression in virus- and oncogene-transformed rat embryo (RE) cells. Previous reports document that ectopic expression of PEG-3 in rodent or human tumor cells produces an aggressive transformed/tumorigenic phenotype. Moreover, PEG-3 expression in rodent tumor cells correlates directly with genomic instability, as indicated by chromosomal alterations and gene amplification, and it promotes angiogenesis. The present studies were designed to further elucidate the functional significance and role of PEG-3 in cancer progression with a specific focus on genomic instability and cancer invasion. Genomic instability was assessed by micronucleus assays and staining of centrosomes to define centrosomal amplification. Immunocytochemical observations revealed that overexpression of PEG-3 in transformed rodent cells induced a loss of chromosomes as established by the appearance of micronuclei and staining of the centrosomes with γ-tubulin antibody, thereby confirming centrosome amplification. Overexpression of PEG-3 modulated the expression of several genes involved in centrosomal duplication, such as p21CIP1/WAF1/MDA-6, nucleophosmin (NPM), and aurora-A kinase. In vitro invasion of transformed rodent cells was augmented by PEG-3, which correlated with an increase in the transcription and activity of matrix metalloproteinase-2 and -9 (MMP-2 and MMP-9), which play important roles in local invasion during cancer progression. These findings demonstrate that PEG-3 plays a central role in augmenting tumor progression by modulating several critical parameters of the carcinogenic process, such as genomic stability and local tumor cell invasion. © 2005 Wiley-Liss, Inc.