Cadherins are major cell-cell adhesion molecules in both tumor and normal tissues. Although serum levels of soluble E-cadherin have been shown to be higher in the cancer patients than in healthy volunteers, the detail mechanism regulating release of soluble E-cadherin remains to be elucidated. Here we show that the ectodomain of E-cadherin is proteolytically cleaved from some cancer cells by a membrane-bound metalloprotease to yield soluble form, and the residual membrane-tethered cleavage product is subsequently degraded by intracellular proteolytic pathway. Futhermore, we show that extracellular calcium influx, that is induced by mechanical scraping of cells or ionomycin treatment, enhances the metalloprotease-mediated E-cadherin cleavage and the subsequent degradation of the cytoplasmic domain. Immunocytochemical analysis demonstrates that the sequential proteolysis of E-cadherin triggered by the calcium influx results in translocation of beta-catenin from the cell-cell contacts to cytoplasm. Our data suggest that calcium influx-induced proteolysis of E-cadherin not only disrupts the cell-cell adhesion but also activates beta-catenin-mediated intracellular signaling pathway, potentially leading to alterations in motility and proliferation activity of cells.