The adhesion between epithelial cells at adherens junctions is regulated by signaling pathways that mediate the intracellular trafficking and assembly of its core components. Insight into the molecular mechanisms of this is necessary to understand how adherens junctions contribute to the functional organization of epithelial tissues. Here, we demonstrate that in human hepatic HepG2 cells, oncostatin M-p42/44 mitogen-activated protein kinase signaling stimulates the phosphorylation of p27(Kip1) on Ser-10 and promotes cell-cell adhesion. The overexpression of wild-type p27 or a phospho-mimetic p27S10D mutant in HepG2 cells induces a hyper-adhesive phenotype. In contrast, the overexpression of a nonphosphorylatable p27S10A mutant prevents the mobilization of E-cadherin and beta-catenin at the cell surface, reduces basal cell-cell adhesion strength, and prevents the stimulatory effect of oncostatin M on cell-cell adhesion. As part of the underlying molecular mechanism, it is shown that in p27S10A-expressing cells beta-catenin interacts with p27 and is prevented from interacting with E-cadherin. The intracellular retention of E-cadherin and beta-catenin is also observed in hepatocytes from p27S10A knockin mice that express the p27S10A mutant instead of wild-type p27. Together, these data suggest that the formation of adherens junctions in hepatocytes requires Ser-10 in p27.