Carcinoembryonic antigen (CEA) is a highly glycosylated cell surface glycoprotein belonging to the immunoglobulin superfamily. CEA has been involved in vitro in adhesion mechanisms, but little is known about the function of this glycoprotein in vivo in normal tissue differentiation and malignancy. With regard to the relationship between CEA expression and tissue differentiation, it has been reported that transfection of the CEA gene in rat L6 myoblasts results in a complete block of myogenic differentiation. To extend investigations to the transformed myogenic counterpart and examine CEA effects on differentiation and malignancy outside the colon system, we have transfected the human CEA gene in human rhabdomyosarcoma cells. Human rhabdomyosarcoma cells transfected with the CEA gene correctly expressed membrane CEA anchored via glycosylphosphatidylinositol and secreted CEA in the medium. CEA gene transfer in human rhabdomyosarcoma cells, which display a limited differentiation ability, does not further inhibit myogenic differentiation or alter in vitro proliferation or natural killer sensitivity. CEA transfection does not affect s.c. growth in nude mice, but the ectopic expression of CEA in human rhabdomyosarcoma cells can strongly inhibit their metastatic ability to lungs and adrenals after i.v. injection. The impairment of metastatic potential correlates with a reduction in the homotypic adhesion properties of the cells. These data suggest that CEA, in some systems, can interfere with intercellular adhesion and, at least for cells not metastatic to the liver, can act as an anti-metastatic molecule.