The type II transmembrane serine protease, matriptase, is an oncogene that is expressed in many epithelia and epithelia-derived carcinomas. Its ability to cleave numerous substrates, including growth factors and their receptors, components of the extracellular matrix and the basement membrane can thus activate pro-proliferative and pro-migratory pathways. The cognate inhibitor of matriptase, Hepatocyte growth factor activator inhibitor-1 (Hai1), is ubiquitously co-expressed, and binds and prevents matriptase activity upon its auto-activation. At embryonic stages, loss of matriptase inhibition in zebrafish hai1a-/- mutants leads to keratinocyte hypermotility, hyperplasia, inflammation, and basement membrane degradation. A screen of bioactive compounds which rescue the skin malignancy phenotype in hai1a-/- embryos allowed us to elucidate the activated signaling pathways downstream of matriptase. We found that keratinocyte malignancy depends on the matriptase mediators EGFR and mTORC1. However, mTOR is not activated through canonical MEK/ERK or PI3K/AKT pathways, but rather via a phospholipase D (PLD)-dependent pathway. Inhibitors of MEK or P13K did not affect mTOR-initiated hyperplasia, and immunoblots showed no increase in pERK or pAKT levels in mutants compared to siblings, while PLD inhibitors fully rescued epidermal malignancy and normalized pRPS6 levels. Adult zebrafish models of epithelial carcinomas established by our lab, combined with mammalian cell culture, allow us to validate the importance of the PLD-mTORC1 signaling axis. Current anti-cancer strategies targeting matriptase activity can have adverse side-effects, especially in light of its numerous substrates, as well as its function not only as an oncogene but also its poorly-understood role as a tumor suppressor. Our findings have important implications for human disease, as treatments targeting crucial downstream effectors of matriptase, including PLD, could have fewer unintended consequences.