Mouse and dog epithelial cell lines, expressing high levels of the Ca(2+)-dependent cell-cell adhesion molecule E-cadherin in vitro, generated invasive and metastatic tumors in athymic mice. From these tumors, neoplastic cell lines were isolated. All ex vivo isolates retained high expression levels of E-cadherin at their surface. Nevertheless, some showed a fusiform morphotype, were defective in Ca(2+)-dependent cell aggregation, and were invasive in vitro, indicating that E-cadherin was not functional. Cell-associated proteoglycans were found to be enlarged in these variants as compared to their counterparts with functional E-cadherin. Treatment of the cells with the drug 4-methylumbelliferyl beta-D-xyloside specifically reduced the amount and size of cell-associated proteoglycans. This same drug induced an epithelial morphotype, increased Ca(2+)- and E-cadherin-dependent cell aggregation, and abrogated invasiveness without influencing E-cadherin expression levels. Our results indicate that enlarged proteoglycans can prevent the homophilic binding of E-cadherin, probably by steric hindrance. This is one more mechanism by which carcinomas may counteract invasion-suppressor genes and acquire malignancy.