Collagen XVII expression has recently been demonstrated to be correlated with the tumor malignance. While Collagen XVII is known to be widely distributed in neurons of the human brain, its precise role in pathogenesis of glioblastoma multiforme (GBM) is unknown. In this study, we identified and characterized a new PTEN-COL17A1 fusion gene in GMB using transcriptome sequencing. Although fusion gene did not result in measurable fusion protein production, its presence is accompanied with high levels of COL17A1 expression, revealed a novel regulatory mechanism of Collagen XVII expression by PTEN-COL17A1 gene fusion. Knocked down Collagen XVII expression in glioma cell lines resulted in decreased tumor invasiveness, along with significant reduction of MMP9 expression, while increased Collagen XVII expression promotes invasive activities of glioma cells and associated with GBM recurrences. Together, our results uncovered a new PTEN-COL17A1 fusion gene and its novel regulatory role in Collagen XVII expression and GBM malignance, and demonstrated that COL17A1 could serve as a useful prognostic biomarker and therapeutic targets for GBM.