The cyclin-dependent kinase inhibitor p21WAF1 has been characterized as an important effector of the tumor suppressor p53 and has been linked to various growth-regulatory processes. To identify a potential role of p21 in anchorage-dependent growth control, we analyzed a pair of HCT116 human colon carcinoma cell lines that differed only in their p21 status. We found that during suspension culture, HCT116 cells (which contain wildtype p53 and p21) continued to proliferate and formed compact multicellular spheroids (MCSs). In contrast, HCT116 cells engineered to lack functional p21 (HCTp21-/-) were unable to form MCSs in suspension culture, ceased proliferation, and eventually died through apoptosis. The parental HCT116 cells underwent the same fate when treated with hyaluronidase, indicating that cell-cell contact might be required for survival in suspension culture. We established that E-cadherin was induced in HCT116 but not in HCTp21-/- cells and accounted for the formation of MCSs. Forced expression of E-cadherin or p21 in HCTp21-/- cells restored the ability to form MCSs and to grow independently of anchorage. Moreover, HCTp21-/- cells exhibited a severely reduced transformed phenotype and demonstrated greatly enhanced chemosensitivity in suspension culture. Thus, our results link an important regulator of the cell cycle machinery to the expression of a cell-cell adhesion molecule involved in tumor formation. Because our results indicate that loss of p21 severely impairs the ability of HCT cells to grow independently of anchorage, it may not be coincidental that inactivating mutations of this gene are very rarely found in tumor cells.