Lung hyperinflation is known to be an important contributing factor in the pathogenesis of ventilator-induced lung injury. Mechanical stretch causes epithelial barrier dysfunction and an increase in alveolar permeability, although the precise mechanisms have not been completely elucidated. p120-catenin is an adherens junction-associated protein that regulates cell-cell adhesion. In this study, we determined the role of p120-catenin in cyclic stretch-induced alveolar epithelial barrier dysfunction. Cultured alveolar epithelial cells (MLE-12) were subjected to uniform cyclic (0.5 Hz) biaxial stretch from 0 to 8 or 20% change in surface area for 0, 1, 2, or 4 h. At the end of the experiments, cells were lysed to determine p120-catenin expression by Western blot analysis. Immunofluorescence staining of p120-catenin and F-actin was performed to assess the integrity of monolayers and interepithelial gap formation. Compared with unstretched control cells, 20% stretch caused a significant loss in p120-catenin expression, which was coupled to interepithelial gap formation. p120-Catenin knockdown with small interfering RNA (siRNA) dose dependently increased stretch-induced gap formation, whereas overexpression of p120-catenin abolished stretch-induced gap formation. Furthermore, pharmacological calpain inhibition or depletion of calpain-1 with a specific siRNA prevented p120-catenin loss and subsequent stretch-induced gap formation. Our findings demonstrate that p120-catenin plays a critical protective role in cyclic stretch-induced alveolar barrier dysfunction, and, thus, maintenance of p120-catenin expression may be a novel therapeutic strategy for the prevention and treatment of ventilator-induced lung injury.