β1 integrin tyrosine phosphorylation by oncogenic kinases, such as Src, has been predicted to induce tumorigenesis by disrupting adhesion and modifying integrin signaling. We directly tested this hypothesis by subjecting mice with “nonphosphorylatable” tyrosine-to-phenylalanine substitutions in the conserved β1 cytoplasmic tail NPxY motifs to a model of cutaneous carcinogenesis in the presence or absence of elevated Src activity. We found that hydrophobic phenylalanine substitutions of both tyrosines diminished the binding of tail-interacting proteins, including talins and kindlins, resulting in reduced β1-mediated adhesion, focal adhesion kinase (FAK) signaling, and epidermal progenitor cell–derived skin tumors. However, increased Src activity drove tumor formation independent of the phenylalanine substitutions by enhancing FAK activity, which in turn maintained the epidermal progenitor state and blocked keratinocyte differentiation. We conclude that a Src/FAK signaling unit inhibits differentiation to promote tumorigenesis downstream of β1 integrin and independent of β1 integrin tyrosine phosphorylation.