Around 25-40% of cases of hereditary diffuse gastric cancer (HDGC) are caused by heterozygous E-cadherin (CDH1) germline mutations. The mechanisms for loss of the second allele still remain unclear. The aims of this study were to elucidate mechanisms for somatic inactivation of the wild-type CDH1 allele and to seek evidence for cadherin switching. Archival tumour material was analysed from 16 patients with CDH1 germline mutations and seven patients fulfilling HDGC criteria without CDH1 germline mutations. The 16 CDH1 exons were sequenced. E-cadherin promoter methylation was analysed by bisulphite sequencing and pyrosequencing and allele specificity was determined using polymorphic loci. Loss of heterozygosity was analysed using microsatellite markers. Cadherin expression levels were determined by real-time RT-PCR and immunohistochemistry. Six of 16 individuals with germline mutations had at least one second hit mechanism. Two exonic mutations (exon 9 truncating, exon 3 missense) and four intronic mutations which may affect splicing were identified. Tumours from 4/16 individuals had promoter hypermethylation that was restricted to the A allele haplotype in three cases. E-cadherin loss (mRNA and protein) generally correlated with identification of a second hit. In cases without germline E-cadherin mutations there was no evidence for somatic mutation or significant promoter methylation. P-cadherin (>25% cells) was expressed in 7/13 (54%) and 4/5 (80%) with and without germline CDH1 mutations, respectively, independent of complete E-cadherin loss. Overall, inactivation of the second CDH1 allele occurs by mutation and methylation events. Methylation is commonly allele-specific and is uncommon without germline mutations. P-cadherin over-expression commonly occurs in individuals with diffuse type gastric cancer.