E-cadherin is a major adherens junction protein of epithelial cells, with a central role in cell-cell adhesion and cell polarity. Newly synthesized E-cadherin is targeted to the basolateral cell surface. We analyzed targeting information in the cytoplasmic tail of E-cadherin by utilizing chimeras of E-cadherin fused to the ectodomain of the interleukin-2alpha (IL-2alpha) receptor expressed in Madin-Darby canine kidney and LLC-PK(1) epithelial cells. Chimeras containing the full-length or membrane-proximal half of the E-cadherin cytoplasmic tail were correctly targeted to the basolateral domain. Sequence analysis of the membrane-proximal tail region revealed the presence of a highly conserved dileucine motif, which was analyzed as a putative targeting signal by mutagenesis. Elimination of this motif resulted in the loss of Tac/E-cadherin basolateral localization, pinpointing this dileucine signal as being both necessary and sufficient for basolateral targeting of E-cadherin. Truncation mutants unable to bind beta-catenin were correctly targeted, showing, contrary to current understanding, that beta-catenin is not required for basolateral trafficking. Our results also provide evidence that dileucine-mediated targeting is maintained in LLC-PK(1) cells despite the altered polarity of basolateral proteins with tyrosine-based signals in this cell line. These results provide the first direct insights into how E-cadherin is targeted to the basolateral membrane.