Rac1, a member of the Rho family small GTPases, regulates E-cadherin-mediated cell-cell adhesion. However, it remains to be clarified how the localization and activation of Rad are regulated at sites of cell-cell contact. Here, using enhanced green fluorescence protein (EGFP)-tagged Rad, we demonstrate that EGFP-Rac1 is colocalized with E-cadherin at sites of cell-cell contact and translocates to the cytosol during disruption of E-cadherin-mediated cell-cell adhesion by Ca2+ chelation, Re-establishment of cell-cell adhesion by restoration of Ca2+ caused EGFP-Rac1 to become relocalized, together with E-cadherin, at sites of cell-cell contact. Engagement of E-cadherin to the apical membrane by anti-E-cadherin antibody (ECCD-2) recruited EGFP-Rac1, We also investigated whether E-cadherin-mediated cell-cell adhesion induced Rad activation by measuring the amounts of GTP-bound Rad based on its specific binding to the Cdc42/Rac1 interactive binding region of p21-activated kinase, The formation of E-cadherin-mediated cell-cell adhesion induced Rad activation. This activation was inhibited by treatment of cells with a neutralizing antibody (DECMA-1) against E-cadherin, or with wortmannin, an inhibitor of phosphatidylinositol 3-kinase (PI 3-kinase), IQGAP1, an effector of Rad, and EGFP-Rac1 behaved in a similar manner during the formation of E-cadherin-mediated cell-cell adhesion. Rad activation was also confirmed by measuring the amounts of coimmunoprecipitated Rad with IQGAP1 during the establishment of cell-cell adhesion, Taken together, these results suggest that Rad is recruited at sites of E-cadherin-mediated cell-cell adhesion acid then activated, possibly through PI 3-kinase.