A body of evidence is emerging that shows a requirement for ephrin ligands in the proper migration of cells, and the formation of cell and tissue boundaries. These processes are dependent on the cell-cell adhesion system, which plays a crucial role in normal morphogenetic processes during development, as well as in invasion and metastasis. Although ephrinB ligands are bi-directional signalling molecules, the precise mechanism by which ephrinB1 signals through its intracellular domain to regulate cell-cell adhesion in epithelial cells remains unclear. Here, we present evidence that ephrinB1 associates with the Par polarity complex protein Par-6 (a scaffold protein required for establishing tight junctions) and can compete with the small GTPase Cdc42 for association with Par-6. This competition causes inactivation of the Par complex, resulting in the loss of tight junctions. Moreover, the interaction between ephrinB1 and Par-6 is disrupted by tyrosine phosphorylation of the intracellular domain of ephrinB1. Thus, we have identified a mechanism by which ephrinB1 signalling regulates cell-cell junctions in epithelial cells, and this may influence how we devise therapeutic interventions regarding these molecules in metastatic disease.