Desmoplasia is a common feature of aggressive cancers, driven by a complex interplay of protein production and degradation. Basigin is a type 1 integral membrane receptor secreted in exosomes or released by ectodomain shedding from the cell surface. Given that soluble basigin is increased in the circulation of patients with a poor cancer prognosis, we explored the putative role of the ADAM12-generated basigin ectodomain in cancer progression. We show that recombinant basigin ectodomain binds β1 integrin and stimulates gelatin degradation and the migration of cancer cells in a matrix metalloproteinase (MMP)- and β1-integrin-dependent manner. Subsequent in vitro and in vivo experiments demonstrated the altered expression of extracellular matrix proteins, including fibronectin and collagen type 5. Thus, we found increased deposits of collagen type 5 in the stroma of nude mice tumors of the human tumor cell line MCF7 expressing ADAM12—mimicking the desmoplastic response seen in human cancer. Our findings indicate a feedback loop between ADAM12 expression, basigin shedding, TGFβ signaling, and extracellular matrix (ECM) remodeling, which could be a mechanism by which ADAM12-generated basigin ectodomain contributes to the regulation of desmoplasia, a key feature in human cancer progression.