Versican is a large extracellular chondroitin sulfate proteoglycan that belongs to the family of lecticans. Alternative splicing of versican generates at least four isoforms named V0, V1, V2, and V3. We show here that ectopic expression of versican V1 isoform induced mesenchymal-epithelial transition (MET) in NIH3T3 fibroblasts, and inhibition of endogenous versican expression abolished the MET in metanephric mesenchyme. MET in NIH3T3 cells was demonstrated by morphological changes and dramatic alterations in both membrane and cytoskeleton architecture. Molecular analysis showed that V1 promoted a "switch" in cadherin expression from N- to E-cadherin, resulting in epithelial specific adhesion junctions. V1 expression reduced vimentin levels and induced expression of occludin, an epithelial-specific marker, resulting in polarization of V1-transfected cells. Furthermore, an MSP (methylation-specific PCR) assay showed that N-cadherin expression was suppressed through methylation of its DNA promoter. Exogenous expression of N-cadherin in V1-transfected cells reversed V1's effect on cell aggregation. Reduction of E-cadherin expression by Snail transfection and siRNA targeting E-cadherin abolished V1-induced morphological alteration. Transfection of an siRNA construct targeting versican also reversed the changed morphology induced by V1 expression. Silencing of endogenous versican prevented MET of metanephric mesenchyme. Taken together, our results demonstrate the involvement of versican in MET: expression of versican is sufficient to induce MET in NIH3T3 fibroblasts and reduction of versican expression decreased MET in metanephric mesenchyme.