The morphogenesis of epithelial cells in the tissue microenvironment depends on the regulation of the forces and structures that keep cells in contact with their neighbours. The formation of cell-cell contacts is integral to the establishment and maintenance of epithelial morphogenesis. In epithelial tissues, the misregulation of the signalling pathways that control epithelial polarization induces migratory and invasive cellular phenotypes. Many cellular processes influence cadherin targeting and function, including exocytosis, endocytosis and recycling. However, the localized generation of the lipid messenger PtdIns(4,5)P(2) is emerging as a fundamental signal controlling all of these processes. The PtdIns(4,5)P(2)-generating enzymes, PIPKs (phosphatidylinositol phosphate kinases) are therefore integral to these pathways. By the spatial and temporal targeting of PIPKs via the actions of its functional protein associates, PtdIns(4,5)P(2) is generated at discrete cellular locales to provide the cadherin-trafficking machinery with its required lipid messenger. In the present review, we discuss the involvement of PtdIns(4,5)P(2) and the PIPKs in the regulation of the E-cadherin (epithelial cadherin) exocytic and endocytic machinery, the modulation of actin structures at sites of adhesion, and the direction of cellular pathways which determine the fate of E-cadherin and cell-cell junctions. Recent work is also described that has defined phosphoinositide-mediated E-cadherin regulatory pathways by the use of organismal models.