Loss of the epithelial phenotype is a well-established phenomenon during progression of carcinomas to a more malignant state. In the present study, we describe a human thyroid tumor cell line (KAT-4), established from a poorly differentiated carcinoma, which displays exceptional features. In culture, the KAT-4 cells had a fast proliferation rate that was not restricted by high cell density, resulting in multilayered growth. Unexpectedly, the cells expressed normal levels of epithelial markers, e.g., cytokeratin, occludin, and E-cadherin, showed apical-basolateral polarization of the plasma membrane including microvilli and junction complexes, and formed intercellular lumens resembling thyroid follicles. Yet, when grown on filter, the cells were unable to establish a tight paracellular barrier. Moreover, E-cadherin expressed at the cell surface consisted of two peptides with abnormal size (135 and 95 kd, respectively) as compared to mature E-cadherin (120 kd) in nonneoplastic thyrocytes. Northern blot analysis and examination of immunoreactivity, glycosylation, and catenin binding suggested that E-cadherin was aberrant because of altered posttranscriptional processing. Thus, the KAT-4 thyroid carcinoma cell line has a unique phenotype, with maintained epithelial morphology despite dysfunctioning tight junctions, abnormal E-cadherin, and loss of contact-inhibited growth, that is not previously identified in other wild-type tumor cell lines.