Celiac disease is characterized by a chronic immune response to dietary gluten, in which T cell responses result in elevated mucosal levels of tumor necrosis factor (TNF)-alpha, interleukin (IL)-1, interferon (IFN)-gamma, and transforming growth factor (TGF)-beta, which induce profound mucosal remodeling associated with increased enterocyte proliferation, apoptosis, and migration. Reduced intestinal expression of the morphoregulatory cell adhesion molecule E-cadherin, which forms complexes with beta-catenin, can increase enterocyte proliferation and migration. However, its mechanism of action in gastrointestinal inflammatory conditions and any involvement in celiac disease is unknown. In this study, we describe changes in E-cadherin and beta-catenin expression in celiac disease tissue and determine the effect of cytokines on their expression in an in vitro model. We assessed E-cadherin and beta-catenin expression in intestinal biopsies from 24 patients with celiac disease, 12 patients with treated celiac disease, and 10 healthy patients by immunohistochemistry, Western blotting, and confocal microscopy. Using Caco-2 cells, we examined the effect of TNF-alpha, IL-1, IFN-gamma, and TGF-beta on E-cadherin expression. E-cadherin transcription was assessed in both intestinal biopsies and Caco-2 cells by in situ hybridization and RT-PCR, respectively. A marked reduction in protein expression of E-cadherin and beta-catenin that returns to normal levels after treatment was observed in celiac disease; this reduction was associated with reduced levels of E-cadherin mRNA. E-cadherin expression in Caco-2 cells was significantly reduced after TNF-alpha, IL-1, and IFN-gamma stimulation. The effect of TNF-alpha on E-cadherin expression was maximal after stimulation for 48 hours and also induced modest reductions in beta-catenin expression. The action of TNF-alpha on E-cadherin was reversible and was shown to act at the transcriptional level. These results demonstrate the novel findings that E-cadherin and beta-catenin expression are reversibly down-regulated in celiac disease and that such changes in epithelial cadherin/catenin complexes may be mediated by cytokines acting on cadherin transcription.