p120‐catenin, a member of the Armadillo gene family, has emerged as both a master regulator of cadherin stability and an important modulator of small GTPase activities. Therefore, it plays novel roles in tumor malignant phenotype, such as invasion and metastasis. We have reported previously that abnormal expression of p120‐catenin is associated with lymph node metastasis in lung squamous cell carcinomas (SCC) and adenocarcinomas. To investigate the role and possible mechanism of p120‐catenin in lung cancer, we knocked down p120‐catenin using small interfering RNA (siRNA). We found that ablation of p120‐catenin reduced the levels of E‐cadherin and β‐catenin proteins, as well as the mRNA of β‐catenin. Furthermore, p120‐catenin depletion inactivated RhoA, but increased the activity of Cdc42 and Rac1, and promoted proliferation and the invasive ability of lung cancer cells both in vitro and in vivo. Our data reveal that p120‐catenin gene knockdown enhances the metastasis of lung cancer cells, probably by either depressing cell–cell adhesion due to lower levels of E‐cadherin and β‐catenin, or altering the activity of small GTPase, such as inactivation of RhoA and activation of Cdc42/Rac1. (Cancer Sci 2009; 100: 441–448)