In previous work, we showed that epidermal growth factor receptor (EGFR) activation causes mucin expression in airway epithelium in vivo and in human NCI-H292 airway epithelial cells and normal human bronchial epithelial (NHBE) cells in vitro. Here we show that the cell surface adhesion molecule, E-cadherin, promotes EGFR-mediated mucin production in NCI-H292 cells in a cell density- and cell cycle-dependent fashion. Addition of the EGFR ligand, transforming growth factor (TGF)-, increased MUC5AC protein expression markedly in dense but not in sparse cultures. MUC5AC-positive cells in dense cultures contained 2N DNA content and did not incorporate bromodeoxyuridine (BrdU), suggesting that they develop via cell differentiation and that a surface molecule involved in cell-cell contact is important for EGFR-mediated mucin production. In support of this hypothesis, in dense cultures of NCI-H292 cells and in NHBE cells at air-liquid interface, blockade of E-cadherin-mediated cell-cell contacts decreased EGFR-dependent mucin production. E-cadherin blockade also increased EGFR-dependent cell proliferation and TGF--induced EGFR tyrosine phosphorylation in dense cultures of NCI-H292 cells, suggesting that E-cadherin promotes EGFR-dependent mucin production and inhibits EGFR-dependent cell proliferation via modulation of EGFR phosphotyrosine levels. Furthermore, in dense cultures, E-cadherin blockade decreased the rate of EGFR tyrosine dephosphorylation, implicating an E-cadherin-dependent protein tyrosine phosphatase in EGFR dephosphorylation. Thus, E-cadherin promotes EGFR-mediated cell differentiation and MUC5AC production, and our results suggest that this occurs via a pathway involving protein tyrosine phosphatase-dependent EGFR dephosphorylation.