Human skin collagenase was quantitated by radioimmunoassay in 21 basal cell carcinomas. Immunoreactive collagenase protein was found to be approximately 2-fold greater in extracts of these tumors than in extracts of normal skin, suggesting that this enzyme may be important in the pathogenesis of soft tissue destruction in vivo. To further define the role of collagenase in such destruction, immunofluorescent staining with specific antiserum to human skin collagenase was used to localize collagenase in the basal cell carcinomas. The enzyme was found only in the stromal elements surrounding the tumor islands. No staining of the epithelial components of the basal cell carcinomas was found. These findings suggest that the normal connective tissue elements may have been stimulated to produce an increased amount of collagenase and emphasize the importance of epithelial-stromal interaction in soft tissue invasiveness.