Nr-CAM, a cell-cell adhesion molecule of the immunoglobulin-like cell adhesion molecule family, known for its function in neuronal outgrowth and guidance, was recently identified as a target gene of beta-catenin signaling in human melanoma and colon carcinoma cells and tissue. Retrovirally mediated transduction of Nr-CAM into fibroblasts induces cell motility and tumorigenesis. We investigated the mechanisms by which Nr-CAM can confer properties related to tumor cell behavior and found that Nr-CAM expression in NIH3T3 cells protects cells from apoptosis in the absence of serum by constitutively activating the extracellular signal-regulated kinase and AKT signaling pathways. We detected a metalloprotease-mediated shedding of Nr-CAM into the culture medium of cells transfected with Nr-CAM, and of endogenous Nr-CAM in B16 melanoma cells. Conditioned medium and purified Nr-CAM-Fc fusion protein both enhanced cell motility, proliferation, and extracellular signal-regulated kinase and AKT activation. Moreover, Nr-CAM was found in complex with alpha4beta1 integrins in melanoma cells, indicating that it can mediate, in addition to homophilic cell-cell adhesion, heterophilic adhesion with extracellular matrix receptors. Suppression of Nr-CAM levels by small interfering RNA in B16 melanoma inhibited the adhesive and tumorigenic capacities of these cells. Stable expression of the Nr-CAM ectodomain in NIH3T3 cells conferred cell transformation and tumorigenesis in mice, suggesting that the metalloprotease-mediated shedding of Nr-CAM is a principal route for promoting oncogenesis by Nr-CAM.