Gene amplification and protein overexpression of MDM2, which is often found in certain types of cancers, indicate that MDM2 plays an important role in tumorigenesis. Interestingly, several clinical reports have demonstrated that amplification of the MDM2 gene correlates with the metastatic stage. Using an antibody array assay, we identified E-cadherin as an MDM2-binding protein and confirmed that E-cadherin is a substrate for the MDM2 E3 ubiquitin ligase. We demonstrate that MDM2 interacts in vivo with E-cadherin, resulting in its ubiquitination and degradation. This regulation appears to be clinically relevant, as we found a significant correlation between high MDM2 and low E-cadherin protein levels in resected tumor specimens recovered from breast cancer patients with lymph node metastases. Ectopic expression of MDM2 in breast cancer cells was found to disrupt cell-cell contacts and enhance cell motility and invasive potential. We found that E-cadherin and MDM2 colocalized on the plasma membrane and in the early endosome, where ubiquitin moieties were attached to E-cadherin. Blocking endocytosis with dominant-negative mutants of dynamin abolished the association of MDM2 with E-cadherin, prevented E-cadherin degradation, and attenuated cell motility as observed by fluorescence microscopy. Thus, we provide evidence to support a novel role for MDM2 in regulating cell adhesions by a mechanism that involves degrading and down-regulating the expression of E-cadherin via an endosome pathway. This novel MDM2-regulated pathway is likely to play a biologically relevant role in cancer metastasis.