Contact inhibition of cell growth is essential for embryonic development and maintenance of tissue architecture in adult organisms, and the growth of tumors is characterized by a loss of contact inhibition of proliferation. The recently identified Hippo signaling pathway has been implicated in contact inhibition of proliferation as well as organ size control. The modulation of the phosphorylation and nuclear localization of Yes-associated protein (YAP) by the highly conserved kinase cascade of the Hippo signaling pathway has been intensively studied. However, cell-surface receptors regulating the Hippo signaling pathway in mammals are not well understood. In this study, we show that Hippo signaling pathway components are required for E-cadherin–dependent contact inhibition of proliferation. Knockdown of the Hippo signaling components or overexpression of YAP inhibits the decrease in cell proliferation caused by E-cadherin homophilic binding at the cell surface, independent of other cell–cell interactions. We also demonstrate that the E-cadherin/catenin complex functions as an upstream regulator of the Hippo signaling pathway in mammalian cells. Expression of E-cadherin in MDA-MB-231 cells restores the density-dependent regulation of YAP nuclear exclusion. Knockdown of β-catenin in densely cultured MCF10A cells, which mainly depletes E-cadherin–bound β-catenin, induces a decrease in the phosphorylation of S127 residue of YAP and its nuclear accumulation. Moreover, E-cadherin homophilic binding independent of other cell interactions is sufficient to control the subcellular localization of YAP. Therefore, Our results indicate that, in addition to its role in cell–cell adhesion, E-cadherin-mediated cell–cell contact directly regulates the Hippo signaling pathway to control cell proliferation.