Abnormally high signals from receptor tyrosine kinases (RTK) are associated with carcinogenesis, and impaired deactivation of RTKs may also be a mechanism in cancer. Hepatocyte growth factor-regulated tyrosine kinase substrate (Hrs) is one of the master regulators that sort activated receptors toward lysosomes and shut down their signals. Hrs contains a ubiquitin-interacting motif and is involved in the endosomal sorting of monoubiquitinated membrane proteins, such as growth factor receptor and E-cadherin. Here, we investigated the role of Hrs in determining the malignancy of cancer cells and discovered that the targeted disruption of Hrs by small interfering RNA effectively attenuated the proliferation, anchorage-independent growth, tumorigenesis, and metastatic potential of HeLa cells in vitro and in vivo. The restoration of Hrs expression increased cell proliferation and anchorage-independent growth in a mouse embryonic fibroblast line established from a Hrs knockout mouse. Further analysis revealed that Hrs depletion was associated with the up-regulation of E-cadherin and reduced beta-catenin signaling. The aberrant accumulation of E-cadherin most likely resulted from impaired E-cadherin degradation in lysosomes. These results suggest that Hrs may play a critical role in determining the malignancy of cancer cells by regulating the degradation of F-cadherin.