The epithelial glycoprotein 40 (EGP40, also known as GA733-2, ESA, KSA, and the 17-1A antigen), encoded by the GA-733-2 gene, is expressed on the baso-lateral cell surface in most human simple epithelia. The protein is also expressed in the vast majority of carcinomas and has attracted attention as a tumor marker. The function of the protein is unknown. We demonstrate here that EGP40 is an epithelium-specific intercellular adhesion molecule. The molecule mediates, in a Ca(2+)-independent manner, a homophilic cell-cell adhesion of murine cells transfected with the complete EGP40 cDNA. Two murine cell lines were tested for the effects of EGP40 expression: fibroblastic L cells and dedifferentiated mammary carcinoma L153S cells. The expression of the EGP40 protein causes morphological changes in cultures of transfected cells--increasing intercellular adhesion of the transfectants--and has a clear effect on cell aggregating behavior in suspension aggregation assays. EGP40 directs sorting in mixed cell populations, in particular, causes segregation of the transfectants from the corresponding parental cells. EGP40 expression suppresses invasive colony growth of L cells in EHS-matrigel providing tight adhesions between cells in growing colonies. EGP40 can thus be considered a new member of the intercellular adhesion molecules. In its biological behavior EGP40 resembles to some extent the molecules of the immunoglobulin superfamily of cell adhesion molecules (CAMs), although no immunoglobulin-like repeats are present in the EGP40 molecule. Certain structural similarities in general organization of the molecule exist between EGP40 and the lin-12/Notch proteins. A possible role of this adhesion molecule in formation of architecture of epithelial tissues is discussed. To reflect the function of the molecule the name Ep-CAM for EGP40 seems appropriate.