Extracellular vesicles (EVs) originating from intraluminal vesicles (ILVs) formed within multivesicular bodies (MVBs), often referred to as small EV (sEV) or exosomes, are aberrantly produced by cancer cells and regulate the tumor microenvironment. The tyrosine kinase c-Src is upregulated in a wide variety of human cancers and is involved in promoting sEV secretion, suggesting its role in malignant progression. In this study, we found that activated Src liberated synaptosomal-associated protein 23 (SNAP23), a SNARE molecule, from lipid rafts to non-rafts on cellular membrane. We also demonstrated that SNAP23 localized in non-rafts induced cholesterol downregulation and ILV formation, resulting in the upregulation of sEV production in c-Src-transformed cells. Furthermore, the contribution of the SNAP23-cholesterol axis on sEV upregulation was confirmed in pancreatic cancer cells. High SNAP23 expression is associated with poor prognosis in patients with pancreatic cancer. These findings suggest a unique mechanism for the upregulation of sEV production via SNAP23-mediated cholesterol downregulation in Src-activated cancer cells.