Pleiomorphic mouse sarcoma S180 cells were transfected with cDNAs for the liver cell adhesion molecule (L-CAM), the neural cell adhesion molecule (N-CAM), or both CAMs. Transfected cells expressed the appropriate CAMs at their surface and those expressing L-CAM (S180L cells) changed from adjoining spindle or round shapes to a closely linked "epithelioid" sheet when grown to confluence. Cells transfected with cDNA for N-CAM (S180N cells) also expressed this CAM on the cell surfaces and bound brain vesicles containing N-CAM but showed no phenotypic change to an epithelioid state. In S180L cells and doubly transfected (S180L/N) cells, L-CAM was concentrated at regions of cell contact and was codistributed with cortical actin. In S180N cells, N-CAM was uniformly distributed on the cell surface. When S180L cells were cocultured with S180L/N cells, N-CAM was not concentrated at boundaries between the S180L and S180L/N cells but was concentrated at boundaries between pairs of S180L/N cells. Fab' fragments of anti-L-CAM dissociated the epithelioid sheets of S180L or S180L/N cells into cells with shapes resembling those of untransfected cells. Cells in epithelioid sheets were polygonal in shape but, unlike cells in true epithelia, had no basement membrane or polar structure; they also lacked tight junctions and desmosomes. Ultrastructural examination showed that, in contrast to the untransfected phenotype, cells in epithelioid sheets had large increases in adherens junctions and gap junctions. Dye coupling experiments indicated that the gap junctions were functional. The frequency of expression of both kinds of junctions was sharply decreased by treatment with anti-L-CAM Fab' fragments. These experiments provide support for the precedence hypothesis, which proposes that the linkage of cells by means of CAMs is a necessary event for the extensive expression of junctional structures.