RATIONALE: p120-catenin (p120) is an armadillo family protein that binds to the cytoplasmic domain of classical cadherins and prevents cadherin endocytosis. The role of p120 in vascular development is unknown. OBJECTIVE: The purpose of this study is to examine the role of p120 in mammalian vascular development by generating a conditionally mutant mouse lacking endothelial p120 and determining the effects of the knockout on vasculogenesis, angiogenic remodeling, and the regulation of endothelial cadherin levels. METHODS AND RESULTS: A conditional Cre/loxP gene deletion strategy was used to ablate p120 expression, using the Tie2 promoter to drive endothelial Cre recombinase expression. Mice lacking endothelial p120 died embryonically beginning at embryonic day 11.5. Major blood vessels appeared normal at embryonic day 9.5. However, both embryonic and extraembryonic vasculature of mutant animals were disorganized and displayed decreased microvascular density by embryonic day 11.5. Importantly, both vascular endothelial cadherin and N-cadherin levels were significantly reduced in vessels lacking p120. This decrease in cadherin expression was accompanied by reduced pericyte recruitment and hemorrhaging. Furthermore, p120-null cultured endothelial cells exhibited proliferation defects that could be rescued by exogenous expression of vascular endothelial cadherin. CONCLUSIONS: These findings reveal a fundamental role for p120 in regulating endothelial cadherin levels during vascular development, as well as microvascular patterning, vessel integrity, and endothelial cell proliferation. Loss of endothelial p120 results in lethality attributable to decreased microvascular density and hemorrhages.