Ca(2+)-dependent cell-cell adhesion is mediated by the cadherin family of transmembrane proteins. Adhesion is achieved by homophilic interaction of the extracellular domains of cadherins on adjacent cells, with the cytoplasmic regions serving to couple the complex to the cytoskeleton. IQGAP1, a novel RasGAP-related protein that interacts with the cytoskeleton, binds to actin, members of the Rho family, and E-cadherin. Calmodulin binds to IQGAP1 and regulates its association with Cdc42 and actin. Here we demonstrate competition between calmodulin and E-cadherin for binding to IQGAP1 both in vitro and in a normal cellular milieu. Immunocytochemical analysis in MCF-7 (E-cadherin positive) and MDA-MB-231 (E-cadherin negative) epithelial cells revealed that E-cadherin is required for accumulation of IQGAP1 at cell-cell junctions. The cell-permeable calmodulin antagonist CGS9343B significantly increased IQGAP1 at areas of MCF-7 cell-cell contact, with a concomitant decrease in the amount of E-cadherin at cell-cell junctions. Analysis of E-cadherin function revealed that CGS9343B significantly decreased homophilic E-cadherin adhesion. On the basis of these data, we propose that disruption of the binding of calmodulin to IQGAP1 enhances the association of IQGAP1 with components of the cadherin-catenin complex at cell-cell junctions, resulting in impaired E-cadherin function.