Associations between plasma membrane-linked proteins and the actin cytoskeleton play a crucial role in defining cell shape and determination, ensuring cell motility and facilitating cell–cell or cell–substratum adhesion. Here, we present evidence that CEACAM1-L, a cell adhesion molecule of the carcinoembryonic antigen family, is associated with the actin cytoskeleton. We have delineated the regions involved in actin cytoskeleton association to the distal end of the CEACAM1-L long cytoplasmic domain. We have demonstrated that CEACAM1-S, an isoform of CEACAM1 with a truncated cytoplasmic domain, does not interact with the actin cytoskeleton. In addition, a major difference in subcellular localization of the two CEACAM1 isoforms was observed. Furthermore, we have established that the localization of CEACAM1-L at cell–cell boundaries is regulated by the Rho family of GTPases. The retention of the protein at the sites of intercellular contacts critically depends on homophilic CEACAM1–CEACAM1 interactions and association with the actin cytoskeleton. Our results provide new evidence on how the Rho family of GTPases can control cell adhesion: by directing an adhesion molecule to its proper cellular destination. In addition, these results provide an insight into the mechanisms of why CEACAM1-L, but not CEACAM1-S, functions as a tumor cell growth inhibitor.