Transcriptional repression of E-cadherin, characteristic of epithelial to mesenchymal transition, is often found also during tumor cell invasion. At metastases, migratory fibroblasts sometimes revert to an epithelial phenotype, by a process involving regulation of the E-cadherin–β-catenin complex. We investigated the molecular basis of this regulation, using human colon cancer cells with aberrantly activated β-catenin signaling. Sparse cultures mimicked invasive tumor cells, displaying low levels of E-cadherin due to transcriptional repression of E-cadherin by Slug. Slug was induced by β-catenin signaling and, independently, by ERK. Dense cultures resembled a differentiated epithelium with high levels of E-cadherin and β-catenin in adherens junctions. In such cells, β-catenin signaling, ErbB-1/2 levels, and ERK activation were reduced and Slug was undetectable. Disruption of E-cadherin–mediated contacts resulted in nuclear localization and signaling by β-catenin, induction of Slug and inhibition of E-cadherin transcription, without changes in ErbB-1/2 and ERK activation. This autoregulation of E-cadherin by cell–cell adhesion involving Slug, β-catenin and ERK could be important in tumorigenesis.