Phosphorylation by tyrosine and serine/threonine kinases regulate the interactions between components of the cadherin-catenin cell-adhesion complex and thus can influence the dynamic modulation of cell adhesion under normal and disease conditions. Previous mutational analysis and localization experiments suggested an involvement of single members of the family of PAKs (p21-activated kinases) in the regulation of cadherin-mediated cell adhesion, but the molecular mechanism remained elusive. In the present study, we address this question using the Drosophila PAK protein Mbt, which is most similar to vertebrate PAK4. Previous phenotypic analysis showed that Mbt has a function to maintain adherens junctions during eye development and indicated a requirement of the protein in regulation of the actin cytoskeleton and the cadherin-catenin complex. Here we show that activation of Mbt leads to destabilization of the interaction of the Drosophila beta-catenin homologue Armadillo with DE-cadherin resulting in a decrease in DE-cadherin-mediated adhesion. Two conserved phosphorylation sites in Armadillo were identified that mediate this effect. The findings of the present study support the previous observation that activation of the human Mbt homologue PAK4 leads to anchorage-independent growth and provide a functional link between a PAK protein and the cadherin-catenin complex.