Lung cancer is the leading cause of cancer death worldwide. Recent data suggest that tumor-associated inflammatory cells may modify lung tumor growth and invasiveness. To determine the role of neutrophil elastase (encoded by Elane) on tumor progression, we used the loxP-Stop-loxP K-ras(G12D) (LSL-K-ras) model of mouse lung adenocarcinoma to generate LSL-K-ras-Elane(-/-) mice. Tumor burden was markedly reduced in LSL-K-ras-Elane(-/-) mice at all time points after induction of mutant K-ras expression. Kaplan-Meier survival analysis showed that whereas all LSL-K-ras-Elane(+/+) mice died, none of the mice lacking neutrophil elastase died. Neutrophil elastase directly induced tumor cell proliferation in both human and mouse lung adenocarcinomas by gaining access to an endosomal compartment within tumor cells, where it degraded insulin receptor substrate-1 (IRS-1). Immunoprecipitation studies showed that, as neutrophil elastase degraded IRS-1, there was increased interaction between phosphatidylinositol 3-kinase (PI3K) and the potent mitogen platelet-derived growth factor receptor (PDGFR), thereby skewing the PI3K axis toward tumor cell proliferation. The inverse relationship identified between neutrophil elastase and IRS-1 in LSL-K-ras mice was also identified in human lung adenocarcinomas, thus translating these findings to human disease. This study identifies IRS-1 as a key regulator of PI3K within malignant cells. Additionally, to our knowledge, this is the first description of a secreted proteinase gaining access to the inside of a cell and altering intracellular signaling.