Adherens junctions facilitate and maintain epithelial cell-cell adhesion. This is true of mammary epithelial cells, both in two dimensional monolayers and in three-dimensional basement membrane cultures. Using the immortalized, functional mouse mammary epithelial scp2 cell line, we found that pharmacological inhibition of phosphatidylinositol 3-kinase (PI3-kinase) disrupted adherens junctions. In monolayers, this disruption was associated with decreased E-cadherin and beta-catenin at sites of cell-cell contact and decreased association of both proteins with the cytoskeleton. Changes in the distribution of f-actin after PI3-kinase inhibition suggest that this disruption of adherens junctions may be mediated by alterations to the cytoskeleton. In basement membrane cultures, PI3-kinase inhibition reversibly prevented adherens junction-dependent spheroid formation and differentiative milk protein gene expression, both in scp2 cells and in a second mouse mammary epithelial cell line, EpH4. Decreasing the calcium concentration in the culture medium produced similar, although less dramatic, phenotypic effects. These data indicate that adherens junctions contribute, at least in part, to the efficient induction of basement membrane-dependent differentiation of mammary epithelial cells.