Carcinoma is an altered state of tissue differentiation in which epithelial cells no longer respond to cues that keep them in their proper position. A break down in these cues has disastrous consequences not only in cancer but also in embryonic development when cells of various lineages must organize into discrete entities to form a body plan. Paraxial protocadherin (PAPC) is an adhesion protein with six cadherin repeats that organizes the formation and polarity of developing cellular structures in frog, fish and mouse embryos. Here we show that protocadherin-8 (PCDH8), the human ortholog of PAPC, is inactivated through either mutation or epigenetic silencing in a high fraction of breast carcinomas. Loss of PCDH8 expression is associated with loss of heterozygosity, partial promoter methylation, and increased proliferation. Complementation of mutant tumor cell line HCC2218 with wild-type PCDH8 inhibited its growth. Two tumor mutants, E146K and R343H, were defective for inhibition of cell growth and migration. Surprisingly, the E146K mutant transformed the human mammary epithelial cell line MCF10A and sustained the expression of cyclin D1 and MYC without epidermal growth factor. We propose that loss of PCDH8 promotes oncogenesis in epithelial human cancers by disrupting cell-cell communication dedicated to tissue organization and repression of mitogenic signaling.