The E-cadherin/β-catenin complex is a structural component of adherens-type junctions in epithelial cells. Moreover, β-catenin acts as an intracellular signaling molecule that can influence the expression of a variety of genes that regulate apoptosis and cell cycle control. Cadmium (Cd) is an environmental toxicant that causes renal dysfunction and disrupts cadherin-dependent cell-cell adhesion in various types of epithelial cells. In this study, we examined the effects of Cd on the subcellular localization of β-catenin, the cadherin/β-catenin complex and β-catenin-mediated gene transcription in rat proximal tubule NRK-52E cells. Exposure to 5-10 μM Cd for 4 h caused the NRK cells to separate from each other without killing the cells or causing them to detach from the growing surface. This effect was associated with the loss of β-catenin and E-cadherin from the cell-cell contacts and apparent changes in the accumulation of β-catenin in the nuclear cell subfraction. The expression of the β-catenin-sensitive gene, c-jun was significantly increased in cells exposed to 5 μM Cd. However, there was no change in the expression of several other β-catenin-regulated genes including: c-myc, cyclin D1 and matrilysin. Additional studies utilizing the TOPFLASH β-catenin reporter gene construct showed that Cd caused a 2-3 fold increase in the expression of the luciferase reporter gene. Overall, these results indicate that Cd disrupts the cadherin/β-catenin complex in NRK-52E cells, but this effect leads to only partial activation of β-catenin-mediated gene transcription.