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Epithelial cell-cell adhesion requires interactions between opposing extracellular domains of E-cadherin, and among the cytoplasmic domain of E-cadherin, catenins, and actin cytoskeleton. Little is known about how the cadherin-catenin-actin complex is assembled upon cell-cell contact, or how these complexes initiate and strengthen adhesion. We have used time-lapse differential interference contrast (DIC) imaging to observe the development of cell-cell contacts, and quantitative retrospective immunocytochemistry to measure recruitment of proteins to those contacts. We show that E-cadherin, alpha-catenin, and beta- catenin, but not plakoglobin, coassemble into Triton X-100 insoluble (TX-insoluble) structures at cell-cell contacts with kinetics similar to those for strengthening of E-cadherin-mediated cell adhesion (Angres, B., A. Barth, and W.J. Nelson. 1996. J. Cell Biol. 134:549- 557). TX-insoluble E-cadherin, alpha-catenin, and beta-catenin colocalize along cell-cell contacts in spatially discrete micro-domains which we designate "puncta," and the relative amounts of each protein in each punctum increase proportionally. As the length of the contact increases, the number of puncta increases proportionally along the contact and each punctum is associated with a bundle of actin filaments. These results indicate that localized clustering of E- cadherin/catenin complexes into puncta and their association with actin is involved in initiating cell contacts. Subsequently, the spatial ordering of additional puncta along the contact may be involved in zippering membranes together, resulting in rapid strengthening of adhesion.