DUSP1 is a dual-specificity phosphatase that regulates mitogen-activated protein (MAP) kinase activity. Studies have associated loss of DUSP1 expression with certain cancers, but there has been no report of a mechanism by which this supports tumor progression. In this study, we found DUSP1 mRNA and protein decreased in human head and neck squamous cell carcinoma tissues compared to adjacent non-tumor controls. To evaluate the impact of this difference, we compared the susceptibility of Dusp-1 deficient mice to oral squamous carcinogenesis induced by 4-nitroquinoline 1-oxide. Dusp1-deficient mice displayed enhanced disease progression, characterized by advanced onset, histological stage, and tumor burden. In a syngeneic model of tumor progression, subcutaneous injection of EO771 cells formed faster-growing tumors in Dusp1-deficient mice, an effect abrogated by inhibition of p38 MAP kinase with SB203580. Histological and quantitative assessments demonstrated increased inflammation and deregulated chemokine and cytokine expression in Dusp1-deficient tumor tissues. Specifically, pro-inflammatory cytokine IL-1β was elevated. IL-1β production was recapitulated ex vivo in primary bone marrow-derived macrophages from Dusp1-deficient mice. Together, our results clearly establish the role of Dusp1 as a tumor suppressor gene that regulates cancer-associated inflammation.