Cell-cell contacts play a vital role in intracellular signaling, although the molecular mechanisms of these signaling pathways are not fully understood. E-cadherin, an important mediator of cell-cell adhesions, has been shown to be cleaved by ␥-secretase. This cleavage releases a fragment of E-cadherin, E-cadherin C-terminal fragment 2 (E-cad/CTF2), into the cytosol. Here, we study the fate and function of this fragment. First, we show that coexpression of the cadherin-binding protein, p120 catenin (p120), enhances the nuclear translocation of E-cad/CTF2. By knocking down p120 with short interfering RNA, we also demonstrate that p120 is necessary for the nuclear localization of E-cad/CTF2. Furthermore, p120 enhances and is required for the specific binding of E-cad/CTF2 to DNA. Finally, we show that E-cad/CTF2 can regulate the p120-Kaiso-mediated signaling pathway in the nucleus. These data indicate a novel role for cleaved E-cadherin in the nucleus.In multicellular organisms, individual cells are often connected with each other via cell-cell adhesions to form threedimensionally structured tissues or organs. Formation of tight and compact cell-cell adhesions suppresses free cell movement and provides cells with a positional cue for the establishment of cell polarity. In addition to the structural roles, it has been long known that cell-cell contacts play an important role in various signal transduction pathways (1, 2). In other words, through cell-cell contacts, cells can exchange a variety of information with their neighbors to behave properly in their community.Cadherins are a family of transmembrane cell-cell adhesion proteins that can be subdivided into several groups including classical cadherins and protocadherins (3). Classical cadherins, of which E-cadherin is the best characterized, play a crucial role in mediating cell-cell contacts at adherens junctions. The extracellular domains of classical cadherins form homophilic ligations. The cytoplasmic domain of cadherin includes two cadherin homology (CH) 2 domains: CH2 domain (located at the membrane proximal region) and CH3 domain (located at the distal region). These domains are conserved between classical cadherins. The CH2 and CH3 domains of cadherins interact with p120-catenin (p120) and -catenin, respectively (4, 5). Furthermore, the CH2 domain of E-cadherin also interacts with Hakai (6, 7).Cadherins, especially classical cadherins, have been shown to be involved in several signaling pathways regulating cell proliferation, differentiation, and survival (8 -11). However, the molecular mechanisms whereby cadherins regulate varied cellular processes are not fully understood. The cytoplasmic domain of cadherins does not possess any intrinsic enzymatic activity that could directly mediate signaling pathways in the cytosol. However, cadherin-binding proteins, especially -catenin and p120, have been shown to localize in the nucleus and play a key role in signal transduction. The crucial role of -catenin in the canonical Wnt signaling pathway has been well...