MDCK cells were engineered to reversibly express mutant E-cadherin protein with a large extracellular deletion. Mutant cadherin overexpression reduced the expression of endogenous E- and K-cadherins in MDCK cells to negligible levels, resulting in decreased cell adhesion. Despite severe impairment of the cadherin adhesion system, cells overexpressing mutant E-cadherin formed fluid-filled cysts in collagen gel cultures and responded to hepatocyte growth factor/scatter factor (HGF/SF) that induced cellular extension formation with a frequency similar to that of control cysts. However, cells were shed from cyst walls into the lumen and into the collagen matrix prior to and during HGF/SF induced tubule extension. Despite the propensity for cell dissociation, MDCK cells lacking cadherin adhesion molecules were not capable of anchorage-independent growth in soft agar and cell proliferation rate was not affected. Thus, cadherin loss does not induce transformation, despite inducing an invasive phenotype, a later stage of tumor progression. These experiments are especially relevant to tumor progression in cells with altered E-cadherin expression, particularly tumor samples with identified E-cadherin extracellular domain genomic mutations.