The E-cadherin-catenin complex regulates Ca(2+)-dependent cell-cell adhesion and is localized to the basolateral membrane of polarized epithelial cells. Uncoupling beta-catenin from E-cadherin by deletion or substitution mutations causes accumulation of these proteins in intracellular compartments, including the trans-Golgi network and early endosomes, and degradation in lysosomes. Expression of a dominant-negative dynamin did not change the pattern of the mutant E-cadherin localization, indicating that the endocytosis of the protein from the cell surface does not contribute significantly to the accumulation of the protein in the intracellular compartments. Alternatively, E-cadherin lacking its entire cytoplasmic domain (tail-less E-cadherin) was detected on the surface of cells and targeted to the basolateral membrane. We found that 20 amino acid residues within the juxtamembrane region contain the signal responsible for intracellular accumulation and the lysosomal targeting of E-cadherin. A dileucine motif within this region seems crucial, because substitution of these residues to alanines resulted in efficient surface expression of the protein. The tail-less E-cadherin construct and the dileucine-substitution construct were detected on the basolateral membranes. Thus, the dileucine motif of E-cadherin is not required for its basolateral targeting.