Patients with the genetic skin blistering disease recessive dystrophic epidermolysis bullosa (RDEB) develop aggressive cutaneous squamous cell carcinoma (cSCC). Metastasis leading to mortality is greater in RDEB than in other patient groups with cSCC. Here we investigate the dermal component in RDEB using mRNA expression profiling to compare cultured fibroblasts isolated from individuals without cSCC and directly from tumor matrix in RDEB and non-RDEB samples. Although gene expression of RDEB normal skin fibroblasts resembled that of cancer-associated fibroblasts, RDEB cancer-associated fibroblasts exhibited a distinct and divergent gene expression profile, with a large proportion of the differentially expressed genes involved in matrix and cell adhesion. RDEB cancer-associated fibroblasts conferred increased adhesion and invasion to tumor and non-tumor keratinocytes. Reduction of COL7A1, the defective gene in RDEB, in normal dermal fibroblasts led to increased type XII collagen, thrombospondin-1, and Wnt-5A, while reexpression of wild type COL7A1 in RDEB fibroblasts decreased type XII collagen, thrombospondin-1, and Wnt-5A expression, reduced tumor cell invasion in organotypic culture, and restricted tumor growth in vivo. Overall, our findings show that matrix composition in patients with RDEB is a permissive environment for tumor development, and type VII collagen directly regulates the composition of matrix proteins secreted by dermal and cancer-associated fibroblasts.