Adherens-type junctions (AJs) are major subcellular targets for tyrosine specific protein phosphorylation [Volberg et al. (1991) Cell Regul., 2, 105-120]. Here we report on the apparent effect of such phosphorylation events on the assembly and integrity of AJs. We show that incubation of MDCK cells with potent inhibitors of tyrosine-specific phosphatases (PTP), namely H2O2 and vanadate, leads to a dramatic increase in AJ-associated phosphotyrosine which was apparent already within 2-5 min of treatment and progressed upon further incubation. Examination of H2O2 vanadate treated cells at later time points indicated that intercellular AJs rapidly deteriorated, concomitantly with a marked increase in the number and size of vinculin and actin containing focal contacts. In parallel, major changes were observed in cell structure and topology, as revealed by electron microscopy. These were manifested by rapid rounding-up of the cells followed by reorganization of the cell monolayer. Other intercellular junctions, including desmosomes and tight junctions, visualized by staining with desmoplakin and ZO-I antibodies, were not significantly affected. To verify that modulation of AJs was indeed related to tyrosine phosphorylation, we have carried out reciprocal experiments in which Rovs Sarcoma virus (RSV) transformed chick lens cells, expressing high levels of pp60src kinase, were treated with inhibitors of tyrosine kinases, (tyrphostins). We show that following such treatment, intercellular AJs which were deteriorated in the transformed cells, were reformed. Based on these observations, we propose that specific tyrosine phosphorylation of AJ components is involved in the downregulation of these cellular contacts.