Endothelial p120-catenin (p120) maintains the level of vascular endothelial cadherin (VE-Cad) by inhibiting VE-Cad endocytosis. Loss of p120 results in a decrease in VE-Cad levels, leading to the formation of monolayers with decreased barrier function (as assessed by transendothelial electrical resistance [TEER]), whereas overexpression of p120 increases VE-Cad levels and promotes a more restrictive monolayer. To test whether reduced endocytosis mediated by p120 is required for VE-Cad formation of a restrictive barrier, we restored VE-Cad levels using an endocytic-defective VE-Cad mutant. This endocytic-defective mutant was unable to rescue the loss of TEER associated with p120 or VE-Cad depletion. In contrast, the endocytic-defective mutant was able to prevent sprout formation in a fibrin bead assay, suggesting that p120•VE-Cad interaction regulates barrier function and angiogenic sprouting through different mechanisms. Further investigation found that depletion of p120 increases Src activity and that loss of p120 binding results in increased VE-Cad phosphorylation. In addition, expression of a Y658F-VE-Cad mutant or an endocytic-defective Y658F-VE-Cad double mutant were both able to rescue TEER independently of p120 binding. Our results show that in addition to regulating endocytosis, p120 also allows the phosphorylated form of VE-Cad to participate in the formation of a restrictive monolayer.