Two estrogen receptors (ERA and ERB) are found throughout the mammary gland. Evidence indicates that, while ERA transduces proliferation signals, ERB opposes this effect and is necessary for epithelial differentiation. Using mouse mammary epithelial cells, we have previously shown that activation of ERB opposes ERA-induced proliferation and increases apoptosis. Furthermore, stable knockdown of ERB resulted in loss of growth contact inhibition. In this work, we report that loss of ERB is associated with a decrease of E-cadherin protein levels through different posttranscriptional regulatory mechanisms. Ligand activation of ERA induced E-cadherin extracellular shedding and internalization only in the absence of ERB, followed by lysosomal degradation. Loss of ERB also led to an increase of E-cadherin uptake in a ligand-independent manner through mechanisms that required caveolae formation. Proteasome activity was necessary for both mechanisms to operate. Increased E-cadherin internalization correlated with the up-regulation of B-catenin transcriptional activity and impaired morphogenesis on Engelbreth-Holm-Swarm matrix. Taken together, these results emphasize the role of epithelial ERB in maintaining cell adhesion and a differentiated phenotype and highlight the potential importance of ERB for the design of specific agonists for use in breast cancer therapy. [Cancer Res 2008;68(21):8695-704]