Cellular adhesion by classical cadherins depends critically on the exact proteolytic removal of their N-terminal prosequences. In this combined solution NMR and X-ray crystallographic study, the consequences of propeptide cleavage of an epithelial cadherin construct (domains 1 and 2) were followed at atomic level. At low protein concentration, the N-terminal processing induces docking of the tryptophan-2 side-chain into a binding pocket on the same molecule. At high concentration, cleavage induces dimerization (KD=0.72 mM, k(off)=0.7 s(-1)) and concomitant intermolecular exchange of the betaA-strands and the tryptophan-2 side-chains. Thus, the cleavage represents the switch from a nonadhesive to the functional form of cadherin.