Hepsin belongs to a family of cell-surface serine proteases, which have sparked interest as therapeutic targets because of the accessibility of extracellular protease domain for inhibitors. Hepsin is frequently amplified and/or overexpressed in epithelial cancers, but it is not clear how enhanced hepsin expression confers a potential for oncogenicity. We show that hepsin is consistently overexpressed in more than 40% of examined breast cancers, including all major biological subtypes. The effects of doxycycline-induced hepsin overexpression were examined in mammary epithelial organoids, and we found that induced hepsin acutely downmodulates its cognate inhibitor, hepatocyte growth factor (HGF) activator inhibitor type 1 (HAI-1). Hepsin-induced depletion of cellular HAI-1 led to a sharp increase in pericellular serine protease activity. The derepressed hepsin proteolytically activated downstream serine proteases, augmented HGF/MET signalling and caused deterioration of desmosomes and hemidesmosomes; structures important for cell cohesion and cell-basement membrane interaction. Moreover, chronic induction of hepsin considerably shortened the latency of Myc-dependent tumourigenesis in the mouse mammary gland. The serine protease and uPA system inhibitor WX-UK1, identified as a micromolar range hepsin inhibitor, prevented hepsin from augmenting HGF/MET signalling and disrupting desmosomes and hemidesmosomes. The findings suggest that the oncogenic activity of hepsin arises not only from elevated expression level but also from depletion of HAI-1, events which together trigger gain-of-function activity impacting HGF/MET signalling and epithelial cohesion. Thus, hepsin overexpression is a major oncogenic conferrer to a serine protease activity involved in breast cancer dissemination.