Epithelial cell extrusion and subsequent apoptosis is a key mechanism to prevent the accumulation of excess cells. By contrast, when driven by oncogene expression, apical cell extrusion is followed by proliferation and represents an initial step of tumorigenesis. E-cadherin (E-cad), the main component of adherens junctions, has been shown to be essential for epithelial cell extrusion, but its mechanistic contribution remains unclear. Here, we provide clear evidence that cell extrusion can be driven by the cleavage of E-cad, both in a wild-type and an oncogenic environment. We first show that CDC42 activation in a single epithelial cell results in its efficient matrix metalloproteinase (MMP)-sensitive extrusion through MEK signalling activation and this is supported by E-cad cleavage. Second, using an engineered cleavable form of E-cad, we demonstrate that, by itself, truncation of extracellular E-cad at the plasma membrane promotes apical extrusion. We propose that extracellular cleavage of E-cad generates a rapid change in cell-cell adhesion that is sufficient to drive apical cell extrusion. Whereas in normal epithelia, extrusion is followed by apoptosis, when combined with active oncogenic signalling, it is coupled to cell proliferation.