E-cadherin mediates cell-cell adhesion by associating with catenins. Loss of E-cadherin function by genetic or epigenetic alteration of the E-cadherin gene (CDH1) leads to tumorigenesis. To study the involvement of E-cadherin dysfunction in liver tumorigenesis, we examined the allelic loss and methylation of 5'-CpG sites of CDH1 in hepatocellular carcinomas (HCCs). Loss of heterozygosity (LOH) of CDH1 and adjacent 16q22-23 loci was observed in 13 of 30 (43%) HCCs. Methylation of the 5'-CpG of CDH1 was analyzed by Southern blot hybridization, and hypermethylation was observed in 8 of the 24 (33%) HCCs examined. The amount of E-cadherin mRNA was analyzed by RNase protection assay, and a decrease in E-cadherin mRNA was observed in 10 of the 23 cases examined. A reduction in E-cadherin was found in 10 of 21 HCCs using immunoblot analysis. The amount of E-cadherin was comparable to that of E-cadherin mRNA. Down-regulation of E-cadherin was common in cases with LOH but rare in cases with methylated promoter. These results suggest that hypermethylation of the CDH1 promoter is present in a small cell population in the tumor, thus the methylation status is liable to vary according to individual cell condition. Hypermethylation was observed in early stage HCCs, whereas LOH was found frequently in more malignant tumors. Down-regulation of E-cadherin is closely related to the progression of HCCs and is stably induced by LOH of CDH1.