Cdx2 is an intestine-specific transcription factor required for normal intestinal epithelium development. Cdx2 regulates the expression of intestine-specific genes and induces cell adhesion and columnar morphogenesis. Cdx2 also has tumor-suppressor properties, including the reduction of colon cancer cell proliferation and cell invasion, the latter due to its effects on cell adhesion. E-cadherin is a cell adhesion protein required for adherens junction formation and the establishment of intestinal cell polarity. The objective of this study was to elucidate the mechanism by which Cdx2 regulates E-cadherin function. Two colon cancer cell lines were identified in which Cdx2 expression was associated with increased cell-cell adhesion and diminished cell migration. In both cell lines, Cdx2 did not directly alter E-cadherin levels but increased its trafficking to the cell membrane compartment. Cdx2 enhanced this trafficking by altering receptor tyrosine kinase (RTK) activity. Cdx2 expression diminished phosphorylated Abl and phosphorylated Rac levels, which are downstream effectors of RTKs. Specific chemical inhibition or short interfering RNA (shRNA) knockdown of c-Abl kinase phenocopied Cdx2's cell-cell adhesion effects. In Colo 205 cells, Cdx2 reduced PDGF receptor and IGF-I receptor activation. This was mediated by caveolin-1, which was induced by Cdx2. Targeted shRNA knockdown of caveolin-1 restored PDGF receptor and reversed E-cadherin membrane trafficking, despite Cdx2 expression. We conclude that Cdx2 regulates E-cadherin function indirectly by disrupting RTK activity and enhancing E-cadherin trafficking to the cell membrane compartment. This novel mechanism advances Cdx2's prodifferentiation and antitumor properties and suggests that Cdx2 may broadly regulate RTK activity in normal intestinal epithelium by modulating membrane trafficking of proteins.