Abstract We report a novel mechanism of cellular growth control. Increasing the density of endothelial or smooth muscle cells in culture increased cell-cell contact and decreased cell spreading, leading to growth arrest. Using a new method to independently control cell-cell contact and cell spreading, we found that introducing cell-cell contact positively regulates proliferation, but that contact-mediated proliferation can be masked by changes in cell spreading: Round cells with many contacts proliferated less than spread cells with none. Physically blocking cell-cell contact or inhibiting PI3K signaling abrogated cell-cell induced proliferation, but inhibiting diffusible paracrine signaling did not. Thus, direct cell-cell contact induces proliferation in these cells.