Epithelial-cadherin (E-cadherin) is a master organizer of the epithelial phenotype. Its function is regulated in part by p120-catenin (referred to herein as p120), a cytoplasmic binding partner that directly regulates cadherin stability. As it has been suggested that cadherins have a role in inflammatory bowel disease (IBD), we sought to investigate this further by assessing the effect of p120 deficiency in mouse small intestine and colon. p120 conditional KO mice were superficially normal at birth but declined rapidly and died within 21 days. Cell-cell adhesion defects and inflammation led to progressive mucosal erosion and terminal bleeding, similar to what is observed in a dominant-negative cadherin mouse model of IBD. Additionally, selective loss of adherens junctions and accumulation of atypical COX-2-expressing neutrophils in p120-null areas of the colon were observed. To elucidate the mechanism, direct effects of p120 deficiency were assessed in vitro in a polarizing colon cancer cell line. Notably, transepithelial electrical resistance was dramatically reduced, neutrophil binding was increased 30 fold, and levels of COX-2, an enzyme associated with IBD, were markedly increased in neutrophils. Our data suggest that p120 loss disrupts the neonatal intestinal barrier and amplifies neutrophil engagement and that these changes lead to catastrophic inflammation during colonization of the neonatal gut with bacteria and other luminal antigens. Thus, we conclude that p120 has an essential role in barrier function and epithelial homeostasis and survival in the intestine.