EGF receptor (EGFR) overexpression correlates with metastasis in a variety of carcinomas, but the underlying mechanisms are poorly understood. We demonstrated that EGF disrupted cell-cell adhesion and caused epithelial-to-mesenchymal transition (EMT) in human tumor cells overexpressing EGFR, and also induced caveolin-dependent endocytosis of E-cadherin, a cell-cell adhesion protein. Chronic EGF treatment resulted in transcriptional downregulation of caveolin-1 and induction of the transcriptional repressor Snail, correlating with downregulation of E-cadherin expression. Caveolin-1 downregulation enhanced beta-catenin-TCF/LEF-1 transcriptional activity in a GSK-3beta-independent manner. Antisense RNA-mediated reduction of caveolin-1 expression in EGFR-overexpressing tumor cells recapitulated these EGF-induced effects and enhanced invasion into collagen gels. We propose that EGF-induced negative regulation of caveolin-1 plays a central role in the complex cellular changes leading to metastasis.