In a search for signaling molecules that act downstream of E-cadherin inactivation in cancer, we examined the expression and localization of E-cadherin-associated proteins in lobular carcinoma, in which the E-cadherin gene is frequently inactivated, and found that E-cadherin down-regulation correlated with the cytoplasmic localization of p120ctn. Similar cytoplasmic localization of p120ctn and growth factor-induced accumulation of tyrosine-phosphorylated p120ctn in the protrusive domain were observed in E-cadherin-deficient breast cancer cells. Down-regulation of endogenous p120ctn by RNA interference promoted stress fiber formation and induced a flattened morphology with an increase of Rho-GTPase activity; it also reduced the development of membranous protrusions and migratory activity in E-cadherin-deficient breast cancer cells. Inactivation of E-cadherin in cancer cells is associated with the conversion from epithelial to mesenchymal phenotype, which also occurs in physiological conditions such as developmental processes. Cytoplasmic localization of p120ctn accompanied by E-cadherin down-regulation was observed in mesoderm cells that had undergone epithelial-mesenchymal transition during early mouse embryogenesis. Collectively, our results suggest that cytoplasmic p120ctn may contribute to the invasive phenotype of E-cadherin-deficient breast cancer cells.