Mutations of E-cadherin have been identified in half of lobular breast cancers and diffuse-type gastric cancers, two tumor subtypes with remarkably similar pathological appearances including small rounded cells with scant cytoplasm and a diffuse growth pattern. A causal role for E-cadherin gene mutations in the lobular breast cancer phenotype was recently demonstrated in E-cadherin knock-out mice. These observations suggested that another gene in the E-cadherin tumor suppressor pathway might be mutated in lobular breast cancers with wild-type E-cadherin genes. Here, we identified E-cadherin gene mutations exclusively in human breast cancer cell lines that grow with a rounded cell morphology. Using expression analyses and gene mutation analyses, we have identified four biallelic inactivating alpha-catenin mutations among 55 human breast cancer cell lines. All four alpha-catenin mutations predicted premature termination of the encoded proteins, and concordantly, none of the four mutant cell lines expressed alpha-catenin proteins. Importantly, three of the alpha-catenin mutant cell lines had the rounded cell morphology and all 14 cell lines with the rounded cell morphology had mutations of either E-cadherin or alpha-catenin. As anticipated, loss of alpha-catenin protein expression was associated with the lobular subtype in primary breast cancers. Together, our observations suggest that alpha-catenin may be a new tumor suppressor gene that operates in the E-cadherin tumor suppressor pathway.