Several signalling pathways contribute to the regulation of epithelial to mesenchymal transition (EMT), either during developmentally regulated processes or in cancer progression and metastasis. Induction of EMT in fully polarized mouse mammary epithelial cells (EpH4) by an inducible c-fos estrogen receptor (FosER) oncoprotein involves loss of E-cadherin expression, nuclear translocation of beta-catenin, and autocrine production of TGFbeta. Reporter assays demonstrate that both beta-catenin/LEF-TCF- and TGFbeta-Smad-dependent signalling activities are upregulated, probably coregulating mesenchymal-specific gene expression during EMT. Stable expression of E-cadherin in mesenchymal FosER cells decreased beta-catenin activity and reduced cell proliferation. However, these cells still exhibited a defect in epithelial polarization and expressed E-cadherin/beta-catenin complexes in the entire plasma membrane. On the other hand, inhibition of TGFbeta-Smad signalling in mesenchymal FosER cells induced flat, cobblestone-like clusters of cells, which relocalized beta-catenin to the plasma membrane but still lacked detectable E-cadherin. Interestingly, inhibition of TGFbeta signalling in the E-cadherin-expressing mesenchymal FosER cells caused their reversion to a polarized epithelial phenotype, in which E-cadherin, beta-catenin, and ZO-1 were localized at their correct lateral plasma membrane domains. These results demonstrate that loss of E-cadherin can contribute to increased LEF/TCF-beta-catenin signalling, which in turn cooperates with autocrine TGFbeta signalling to maintain an undifferentiated mesenchymal phenotype.