Lateral clustering of E-cadherin molecules is required for the adhesive properties of this cell-cell adhesion molecule. Both the extracellular domain and the cytoplasmic region of E-cadherin were previously reported to contribute to lateral clustering, but little is known about a role of the transmembrane domain in this respect. Following our previous findings indicating self-assembly of artificial transmembrane segments based on leucine residues, we asked whether the leucine-rich transmembrane segment of E-cadherin participates in lateral clustering. Here, we demonstrate that its transmembrane domain self-assembles as analyzed using the ToxR reporter system. Certain point mutations within the transmembrane domain markedly reduced self-assembly. To study whether the same point mutations also affect E-cadherin-mediated adhesion in vivo, wild-type and mutant E-cadherin cDNAs were transfected into Ltk(-) cells. Indeed, cell aggregation assays revealed significantly reduced adhesiveness when mutations had been introduced which disrupted transmembrane segment interaction. In control experiments, cell-surface expression, interaction with catenins and the cytoskeleton as well as trypsin-resistance of the protein were unaffected. These data suggest that interactions between the transmembrane segments are important for the lateral association of E-cadherin molecules required for cell-cell adhesion.