Normal human breast epithelial (HBE) cells grown at logarithmic phase and those at the plateau phase were starved of EGF for 3 days then stimulated with EGF. HBE cells which were growth arrested at low density responded to EGF to initiate DNA synthesis 20 h later, whereas cells growth arrested at saturated density lost their responsiveness to EGF. Although the responsiveness to EGF between the two cultures at different densities was distinct, neither the number nor the affinity of EGF receptor (EGFR) in the two cultures significantly differed. In addition, the EGFR mRNA level was not affected by an increase in the cell density. A significant difference between the two cultures was the responsiveness of EGFR to EGF. The intrinsic tyrosine kinase activity and dimerization of the EGFR in cells at low density were induced by EGF, whereas those in cells at saturated density were not. Immunostaining revealed that the EGFR was localized only in the boundary region where adjacent cells are in close contact at low density but in the entire surrounding region of each cell at saturated density. The distribution of EGFR overlapped the region where the cell-cell adhesion protein, E-cadherin, is distributed. The E-cadherin mRNA levels in the two cultures were comparable; however, nearly fivefold more E-cadherin protein accumulated in cells at saturated than at low density. Incubation of cells at saturated density with an antibody to E-cadherin followed by adding EGF resulted in the stimulation of DNA synthesis, which was preceded by autophosphorylation but not dimerization of the EGFR. The results suggested that density-dependent inhibition of growth is achieved through prevention of the EGFR activation by extensive cell-cell adhesion that is mediated by excess E-cadherin.