Dispersal of epithelial cells is an important aspect of tumorigenesis, and invasion. Factors such as hepatocyte growth factor induce the breakdown of cell junctions and promote cell spreading and the dispersal of colonies of epithelial cells, providing a model system to investigate the biochemical signals that regulate these events. Multiple signaling proteins are phosphorylated in epithelial cells during hepatocyte growth factor-induced cell dispersal, including c-Cbl, a protooncogene docking protein with ubiquitin ligase activity. We have examined the role of c-Cbl and a transforming variant (70z-Cbl) in epithelial cell dispersal. We show that the expression of 70z-Cbl in Madin-Darby canine kidney epithelial cells resulted in the breakdown of cell-cell contacts and alterations in cell morphology characteristic of epithelial-mesenchymal transition. Structure-function studies revealed that the amino-terminal portion of c-Cbl, which corresponds to the Cbl phosphotyrosine-binding/Src homology domain 2, is sufficient to promote the morphological changes in cell shape. Moreover, a point mutation at Gly-306 abrogates the ability of the Cbl Src homology domain 2 to induce these morphological changes. Our results identify a role for Cbl in the regulation of epithelial-mesenchymal transition, including loss of adherens junctions, cell spreading, and the initiation of cell dispersal.