Cadherins are cell-cell adhesion receptors that are essential for the establishment of the epithelial cell shape and maintenance of the differentiated epithelial phenotype. In order to show efficient adhesion, cadherin receptors require an association with actin filaments and the activity of RHO proteins. The RHO family of small GTPases is primarily involved in the reorganization of the cytoskeleton. In different cell types, each member of the family can induce specific types of organization of actin filaments: stress fibers (Rho), lamellae/ruffles (Rac), or filopodia (Cdc42). This review focuses on how the function of small GTPases may impinge on the regulation of cadherin-dependent adhesion. In particular, it discusses the impact that the above cytoskeletal structures induced by RHO proteins have on the development of epithelial morphology. Finally, the participation of small GTPase-interacting proteins is considered during the remodeling of cell shape that follows cell-cell contact formation. (C) 2000 Academic Press.