The synovial lining of diarthrodial joints is composed of a condensed network of synoviocytes that form an intact layer via cell-to-cell contacts with significant intercellular matrix spaces. However, the molecular basis for synovial lining formation and its structural integrity has not been previously defined. In this study, using a three-dimensional fibroblast-like synoviocyte in vitro organ culture system, we provide evidence that cadherin-11 expressed in fibroblast-like synoviocytes plays a determining role in establishing the synovial lining layer. Fibroblast-like synoviocytes that were grown in three-dimensional matrices demonstrated formation of a lining structure at the interface between the matrix and the fluid phase. Treatment of fibroblast-like synoviocyte organ cultures with a cadherin-11-Fc fusion protein efficiently abrogated lining layer organization. Moreover, because E-cadherin-expressing fibroblasts failed to organize a lining layer structure at the tissue boundary, this effect appears to be a distinct characteristic of fibroblasts expressing cadherin-11. We found that cadherin-11 mediated fibroblast-like synoviocyte cell-to-cell adhesion via formation of adherens junctions that were linked to and remodeled the actin cytoskeleton. Together, these studies implicate cadherin-11 in synovial tissue and lining layer formation and provide an in vitro system to model fibroblast-like synoviocyte behavior and function in organizing the synovial tissue.