BACKGROUND: Tissue-specific alternative splicing is known to be critical to emergence of tissue identity during development, yet its role in malignant transformation is undefined. Tissue-specific splicing involves evolutionary-conserved, alternative exons, which represent only a minority of total alternative exons. Many, however, have functional features that influence activity in signaling pathways to profound biological effect. Given that tissue-specific splicing has a determinative role in brain development and the enrichment of genes containing tissue-specific exons for proteins with roles in signaling and development, it is thus plausible that changes in such exons could rewire normal neurogenesis towards malignant transformation. METHODS: We used integrated molecular genetic and cell biology analyses, computational biology, animal modeling, and clinical patient profiles to characterize the effect of aberrant splicing of a brain-enriched alternative exon in the membrane-binding tumor suppressor Annexin A7 (ANXA7) on oncogene regulation and brain tumorigenesis. RESULTS: We show that aberrant splicing of a tissue-specific cassette exon in ANXA7 diminishes endosomal targeting and consequent termination of the signal of the EGFR oncoprotein during brain tumorigenesis. Splicing of this exon is mediated by the ribonucleoprotein Polypyrimidine Tract-Binding Protein 1 (PTBP1), which is normally repressed during brain development but, we find, is excessively expressed in glioblastomas through either gene amplification or loss of a neuron-specific microRNA, miR-124. Silencing of PTBP1 attenuates both malignancy and angiogenesis in a stem cell-derived glioblastoma animal model characterized by a high native propensity to generate tumor endothelium or vascular pericytes to support tumor growth. We show that EGFR amplification and PTBP1 overexpression portend a similarly poor clinical outcome, further highlighting the importance of PTBP1-mediated activation of EGFR. CONCLUSIONS: Our data illustrate how anomalous splicing of a tissue-regulated exon in a constituent of an oncogenic signaling pathway eliminates its tumor suppressor function and promotes tumorigenesis. This paradigm of malignant glial transformation as a consequence of tissue-specific alternative exon splicing in a tumor suppressor, may have widespread applicability in explaining how changes in critical tissue-specific regulatory mechanisms reprogram normal development to oncogenesis. SECONDARY CATEGORY: n/a.