The tumor suppressor adenomatous polyposis coli (APC) is mutated in familial adenomatous polyposis and in many sporadic colorectal tumors. Adenomatous polyposis coli is known to negatively regulate Wnt signaling by inducing the degradation of β-catenin. Adenomatous polyposis coli also interacts with the guanine nucleotide exchange factors Asef and Asef2 and stimulates their activity, thereby regulating cell adhesion and migration. Here we show that in confluent, non-motile MDCK II cells, Asef/Asef2 are colocalized with APC at the sites of cell–cell adhesion at the apical and junctional levels. In contrast, in colorectal tumor cells containing mutated APC, significant amounts of Asef/Asef2 and the truncated mutant APCs are localized mainly in the cytoplasm. These results suggest that localization of the Asef/Asef2-APC complex at the sites of cell–cell contact is critical for the regulation of cell adhesion, and that the aberrant subcellular localization of these complexes in colorectal tumor cells may contribute to the cell's aberrant adhesive and migratory properties.