Recent studies have demonstrated the importance of E-cadherin, a homophilic cell–cell adhesion molecule, in contact inhibition of growth of normal epithelial cells. Many tumor cells also maintain strong intercellular adhesion, and are growth-inhibited by cell– cell contact, especially when grown in three-dimensional culture. To determine if E-cadherin could mediate contact-dependent growth inhibition of nonadherent EMT/6 mouse mammary carcinoma cells that lack E-cadherin, we transfected these cells with an exogenous E-cadherin expression vector. E-cadherin expression in EMT/6 cells resulted in tighter adhesion of multicellular spheroids and a reduced proliferative fraction in three-dimensional culture. In addition to increased cell–cell adhesion, E-cadherin expression also resulted in dephosphorylation of the retinoblastoma protein, an increase in the level of the cyclin-dependent kinase inhibitor p27^kip1 and a late reduction in cyclin D1 protein. Tightly adherent spheroids also showed increased levels of p27 bound to the cyclin E-cdk2 complex, and a reduction in cyclin E-cdk2 activity. Exposure to E-cadherin–neutralizing antibodies in three-dimensional culture simultaneously prevented adhesion and stimulated proliferation of E-cadherin transfectants as well as a panel of human colon, breast, and lung carcinoma cell lines that express functional E-cadherin. To test the importance of p27 in E-cadherin–dependent growth inhibition, we engineered E-cadherin–positive cells to express inducible p27. By forcing expression of p27 levels similar to those observed in aggregated cells, the stimulatory effect of E-cadherin–neutralizing antibodies on proliferation could be inhibited. This study demonstrates that E-cadherin, classically described as an invasion suppressor, is also a major growth suppressor, and its ability to inhibit proliferation involves upregulation of the cyclin-dependent kinase inhibitor p27.