Two important protein-protein interactions establish E-cadherin (Cdh1) in the adhesion complex; homophilic binding via the extra-cellular (EC1) domain and cytoplasmic tail binding to β-catenin. Here, we evaluate whether E-cadherin binding can inhibit β-catenin when there is loss of Adenomatous polyposis coli (APC) from the β-catenin destruction complex. Combined conditional loss of Cdh1 and Apc were generated in the intestine, intestinal adenoma and adenoma organoids. Combined intestinal disruption (Cdh1 fl/fl Apc fl/fl Vil-CreERT2) resulted in lethality, breakdown of the intestinal barrier, increased Wnt target gene expression and increased nuclear β-catenin localization, suggesting that E-cadherin inhibits β-catenin. Combination with an intestinal stem cell Cre (Lgr5CreERT2) resulted in Apc Δ/Δ recombination and adenoma, but intact Cdh1 fl/fl alleles. Cultured Apc Δ/Δ Cdh1 fl/fl adenoma cells infected with adenovirus-Cre induced Cdh1 fl/fl recombination (Cdh1Δ/Δ), disruption of organoid morphology, nuclear β-catenin localization, and cells with an epithelial-mesenchymal phenotype. Complementation with adenovirus expressing wild-type Cdh1 (Cdh1-WT) rescued adhesion and β-catenin membrane localization, yet an EC1 specific double mutant defective in homophilic adhesion (Cdh1-Mut W2A, S78W) did not. These data suggest that E-cadherin inhibits β-catenin in the context of disruption of the APC-destruction complex, and that this function is also EC1 domain dependent. Both binding functions of E-cadherin may be required for its tumour suppressor activity.