High-grade transitional cell carcinomas (TCCs) of the urinary bladder are frequently associated with carcinoma in situ, which may replace large areas of the mucosa of the urinary tract. The invasive component of TCCs often reveals a loss of expression of the cell-cell adhesion molecule E-cadherin, but the role of E-cadherin in the development and expansion of intraepithelial neoplasia is unknown. To study the underlying mechanism of intraepithelial expansion (IEE), we have developed an IEE assay. Human TCC cell lines were investigated in this IEE assay for their capacity to replace the surrounding normal murine urothelial cells. In vitro IEE appeared to be prominent in three (SD, RT112, and 1207) of the four E-cadherin-positive cell lines. Although the two E-cadherin-negative cell lines (T24 and J82) were able to penetrate surrounding normal urothelium as single cells, they largely lacked the capacity of IEE. These results prompted us to investigate whether the cell-cell adhesion molecule E-cadherin is an important determinant for IEE. T24 cells that were transfected with full-length mouse E-cadherin cDNA displayed an enhanced IEE rate. Transfection did not influence their proliferative capacity, their pattern and level of integrin expression, or their ability to expand in the absence of surrounding urothelium. The data suggest that E-cadherin-mediated cohesiveness is an important factor in the IEE of bladder carcinoma cells. These observations argue for a dual, paradoxical role of E-cadherin in bladder tumorigenesis. On the one hand, E-cadherin promotes the expansion of intraepithelial neoplasia; on the other hand, its loss correlates with invasive behavior.