The molecular mechanisms by which the tight junction integral membrane protein, occludin promotes cell adhesion and establishes an endothelial monolayer permeability barrier have not been elucidated. In particular, the amino acid sequences of the occludin cell adhesion recognition (CAR) sites have not been determined. Here we demonstrate that a cyclic peptide containing the sequence LYHY, which is found in the second extracellular domain of occludins in all mammalian species, inhibits the establishment of endothelial cell barriers in vitro and in vivo. This cyclic peptide also prevents the aggregation of fibroblasts stably transfected with cDNA encoding occludin. The data suggest that the LYHY motif is an occludin CAR sequence.