E-cadherin (E-cad) is critical for the development and maintenance of polarity and differentiation of epithelial cells. Our previous study revealed gallbladder (GB) cancer cell lines expressing E-cadherin could form cystic or spheroid-like structures in a 3-D matrix. This differentiated phenotype was disrupted by addition of anti-E-cad antibody. By extrapolation, we postulated that E-cad might directly regulate epithelial morphogenesis in GB carcinoma. In the present study, we introduced an expression plasmid harboring mouse E-cad cDNA (pBATEM2) into an undifferentiated GB cancer cell line (G-415) which did not express E-cad. We systemically compared differences including cell phenotype, morphogenesis, and ultrastructure between the parental G-415 cells (parental-cells) and E-cad transfected cells (E-cad-cells) under various conditions such as monolayer culture, 3-D gel culture as well as inoculation of nude mice. In contrast to parental-cells, E-cad-cells presented a typical epithelial shape with tight intercellular connections in monolayer culture. They developed round multicellular cystic structures in 3-D gel. The cysts secreted mucous substances via the apical surface into the cystic lumen, in which the substances were positively stained by alcian blue (pH 2.5). Ultrastructural sections of gel/xenograft tumor revealed re-establishment of adherens junctions and restoration of cell polarization. Immunohistochemical and immunofluorescent staining showed exogenous E-cad primarily accumulated at the extended cell-cell contact sites. Moreover, the membranous translocation of alpha-, and beta-catenin from cytoplasm was also found in 3-D matrix and xenograft tumor sections. Histopathologic examination revealed papillary adenocarcinoma features in the central region of the xenograft tumors. Our results demonstrate that exogenous expression of E-cad in undifferentiated GB cancer G-415 cells reverses differentiated characteristics in spatial growth conditions. Simultaneous translocation of alpha-, beta-catenin to membrane following functional E-cad expression may be a critical event for this process.