Epithelial-mesenchymal transition (EMT) occurs during embryonic development and may also be associated with the metastatic spread of epithelial tumors. During EMT, E-cadherin is down-regulated and this correlates with increased motility and invasion of cells. We show that differentiation of human embryonic stem (ES) cells in monolayer culture is associated with an E- to N-cadherin switch, increased vimentin expression, up-regulation of E-cadherin repressor molecules (Snail and Slug proteins), and increased gelatinase (matrix metalloproteinases; MMP-2 and MMP-9) activity and cellular motility, all characteristic EMT events. The 5T4 oncofetal antigen, previously shown to be associated with early human ES cell differentiation, is also part of this process. Abrogation of E-cadherin–mediated cell-cell contact in undifferentiated ES cells using neutralizing antibody (nAb) SHE78.7 resulted in increased cellular motility, altered actin cytoskeleton arrangement and a mesenchymal phenotype together with presentation of the 5T4 antigen at the cell surface. nAb-treated ES cells remained in an undifferentiated state, as assessed by OCT-4 protein expression, and did not express EMT-associated transcripts. Removal of nAb from ES cells resulted in the restoration of cell-cell contact, absence of cell surface 5T4, decreased mesenchymal cellular morphology and motility, and enabled the differentiation of the cells to the three germ layers upon their removal from the fibroblast feeder layer. We conclude that E-cadherin functions in human ES cells to stabilize the cortical actin cyoskeletal arrangement and this prevents cell surface localization of the 5T4 antigen. Furthermore, human ES cells represent a useful model system with which to study EMT events relevant to embryonic development and tumor cell metastasis. [Cancer Res 2007;67(23):11254–62]