Interactions between E-cadherin, beta-catenin and PTP1B (protein tyrosine phosphatase 1B) are crucial for the organization of AJs (adherens junctions) and epithelial cell-cell adhesion. In the present study, the effect of acetaldehyde on the AJs and on the interactions between E-cadherin, beta-catenin and PTP1B was determined in Caco-2 cell monolayers. Treatment of cell monolayers with acetaldehyde induced redistribution of E-cadherin and beta-catenin from the intercellular junctions by a tyrosine phosphorylation-dependent mechanism. The PTPase activity associated with E-cadherin and beta-catenin was significantly reduced and the interaction of PTP1B with E-cadherin and beta-catenin was attenuated by acetaldehyde. Acetaldehyde treatment resulted in phosphorylation of beta-catenin on tyrosine residues, and abolished the interaction of beta-catenin with E-cadherin by a tyrosine kinase-dependent mechanism. Protein binding studies showed that the treatment of cells with acetaldehyde reduced the binding of beta-catenin to the C-terminal region of E-cadherin. Pairwise binding studies using purified proteins indicated that the direct interaction between E-cadherin and beta-catenin was reduced by tyrosine phosphorylation of beta-catenin, but was unaffected by tyrosine phosphorylation of E-cadherin-C. Treatment of cells with acetaldehyde also reduced the binding of E-cadherin to GST (glutathione S-transferase)-PTP1B. The pairwise binding study showed that GST-E-cadherin-C binds to recombinant PTP1B, but this binding was significantly reduced by tyrosine phosphorylation of E-cadherin. Acetaldehyde increased the phosphorylation of beta-catenin on Tyr-331, Tyr-333, Tyr-654 and Tyr-670. These results show that acetaldehyde induces disruption of interactions between E-cadherin, beta-catenin and PTP1B by a phosphorylation-dependent mechanism.