Cadherin clustering is a unique molecular process that mediates and controls cell-cell adhesion. In addition, it also regulates the actin cytoskeleton, polarity, proliferation, and apparently other structures and signaling pathways. Cadherin clusters reinforce weak individual adhesive bonds and generate functional cell-cell adhesion links. By connecting to F-actin, they determine the overall organization and dynamics of the actin cytoskeleton. Finally, they provide specific structural scaffolds for various signaling pathways. Despite such incredibly important functions, which obviously play out in nearly every aspect of tissue morphogenesis, the molecular mechanisms and regulation of cadherin clustering remains to be studied. This proposal will shed light on how cadherin clusters form and how they participate in such diverse array of cellular mechanisms. The work done under this proposal in previous years showed that adherens junctions (AJs), the major cell-cell adhesion structures in vertebrates, consist of numerous transient but highly adhesive cadherin nanoclusters. The short lifetime of each cluster makes AJs adhesive and flexible at the same time. The continuous generation of these clusters is apparently based on a remarkable reaction – cooperative binding of the cadherin-associated protein α-catenin to actin filaments. The assembly- disassembly cycles of both cadherin clusters and associated F-actin are tightly coupled thereby synchronizing cadherin and actin dynamics in adjacent cells. Finally, we found that cadherin clusters could be structurally diversified by cadherin/catenin-bound proteins. Diversification of cadherin clustering is based on the fact that each of these proteins provides specific modes of lateral cadherin- cadherin interactions. A variety of these interactions results in formation of an array of distinct clusters each of which might have particular functions. The advances in understanding cadherin clustering allow us to come up with this proposal, which includes: (i) the role of cadherin in clustering and function of two proteins, signaling protein Erbin, and adaptor protein PLEKHA5; (ii) molecular mechanisms interconnecting extracellular cadherin binding events with α-catenin-binding to F-actin; and (iii) the role of cadherin clustering in some examples of tissue morphogenesis.