Classical cadherin adhesion molecules can function as adhesion-activated cell-signaling receptors. One key target for cadherin signaling is the lipid kinase phosphoinositide (PI) 3-kinase, which is recruited to cell-cell contacts and activated by E-cadherin. In this study, we sought to identify upstream factors necessary for E-cadherin to activate PI 3-kinase signaling. We found that inhibition of tyrosine kinase signaling blocked recruitment of PI 3-kinase to E-cadherin contacts and abolished the ability of E-cadherin to activate PI 3-kinase signaling. Tyrosine kinase inhibitors further perturbed several parameters of cadherin function, including cell adhesion and the ability of cells to productively extend nascent cadherin-adhesive contacts. Notably, the functional effects of tyrosine kinase blockade were rescued by expression of a constitutively active form of PI 3-kinase that restores PI 3-kinase signaling. Finally, using dominant negative Src mutants and Src-null cells, we identified Src as one key upstream kinase in the E-cadherin/PI 3-kinase-signaling pathway. Taken together, our findings indicate that tyrosine kinase activity, notably Src signaling, can contribute positively to cadherin function by supporting E-cadherin signaling to PI 3-kinase.