The functions of many organs depend on the generation of an epithelium. The transition from a set of loosely connected nonpolarized cells to organized sheets of closely associated polarized epithelial cells requires the assembly of specialized cell junctions. In vertebrates, three major types of junctions are responsible for epithelial integrity: adherens junctions, tight junctions, and desmosomes. p120 catenin (p120ctn) is an Armadillo family member and a component of the cadherin-catenin complex in the adherens junction. It fulfils pleiotropic functions according to its subcellular localization: modulating the turnover rate of membrane-bound cadherins, regulating the activation of small RhoGTPases in the cytoplasm, and modulating nuclear transcription. Over the last two decades, knowledge of p120ctn obtained from in vitro experiments has been confirmed and extended by using different animal models. It has become clear that p120ctn is essential for normal development and homeostasis, at least in frog and mammals. p120ctn is a Src substrate that can be phosphorylated at different tyrosine, serine and threonine residues and can dock various kinases and phosphatases. Thereby, p120ctn regulates the phosphorylation status and the junctional stability of the cadherin-catenin complex. Multiple p120ctn isoforms are generated by alternative splicing, which allows the translation to be initiated from four start codons and enables the inclusion of four alternatively used exons. We will discuss the effects of different p120ctn isoforms on cadherin turnover and intracellular signaling, in particular RhoGTPase activity and phosphorylation events.