Cadherins form a large and pleiotropic superfamily of membranous proteins sharing Ca2+-binding repeats. While the importance of classic cadherins such as E- or N-cadherin for tumorigenesis is acknowledged, there is much less information about other cadherins that are merely considered as tissue-specific adhesion molecules. Here, we focused on the atypical cadherin MUCDHL that stood out for its unusual features and unique function in the gut. Analyses of transcriptomic data sets (n > 250) established that MUCDHL mRNA levels are down-regulated in colorectal tumors. Importantly, the decrease of MUCDHL expression is more pronounced in the worst-prognosis subset of tumors and is associated with decreased survival. Molecular characterization of the tumors indicated a negative correlation with proliferation-related processes (e.g., nucleic acid metabolism, DNA replication). Functional genomic studies showed that the loss of MUCDHL enhanced tumor incidence and burden in intestinal tumor-prone mice. Extensive structure/function analyses revealed that the mode of action of MUCDHL goes beyond membrane sequestration of ß-catenin and targets through its extracellular domain key oncogenic signaling pathways (e.g., EGFR, AKT). Beyond MUCDHL, this study illustrates how the loss of a gene critical for the morphological and functional features of mature cells contributes to tumorigenesis by dysregulating oncogenic pathways.