Cell-culture studies indicate that tyrosine phosphorylation of the cadherin-catenin-complex (CCC) is one of the post-translational mechanism regulating E-cadherin-mediated cell adhesion. In this investigation, controlled application of a tyrosine phosphatase inhibitor (orthovanadate) and tyrosine kinase inhibitor (tyrphostin) to early Drosophila embryos, followed by biochemical assays and phenotypic analysis, has been utilized to address the mechanism by which tyrosine phosphorylation regulates E-cadherin-mediated cell adhesion in vivo. Our data suggest that, in the Drosophila embryo, beta-catenin (Drosophila homolog Armadillo) is the primary tyrosine-phosphorylated protein in the CCC. The increase in tyrosine phosphorylation correlates with a loss of epithelial integrity and adherens junctions in the ectoderm of early embryos. Late application of the phosphatase inhibitor does not have this effect, presumably because of the formation of septate junctions in late embryos. Co-immunoprecipitation assays have demonstrated that tyrosine hyper-phosphorylation does not cause the dissociation of Drosophila (D)E-cadherin and alpha-catenin or Armadillo, suggesting that abrogation in adhesion is most likely attributable to the detachment of actin-associated proteins from the CCC. Finally, although the Drosophila epidermal growth factor receptor (EGFR), a receptor tyrosine kinase, is linked to the CCC and shows genetic interactions with DE-cadherin, we find that a constitutively active Drosophila EGFR construct does not cause any detectable changes in the level of tyrosine phosphorylation of Armadillo or destabilization of the CCC.