Ataxia telangiectasia is a hereditary pleiomorphic syndrome caused by loss of Atm, a phosphoprotein involved in multiple signaling pathways. Here, we propose a novel role for atm in cultured epithelial cells, namely the regulation of cell growth by contact inhibition. We show that atm is upregulated in epithelial cells reaching confluence. Conditional expression of the PI 3-Kinase domain of atm in non-confluent Tac-2 epithelial cells increases the expression of the anti-proliferative gene Tis-21 and downregulates key cell cycle regulator genes, such as cyclins A, B1, B2, E and E2. Finally, we demonstrate that upregulation of atm, and thus Tis-21, in confluent Tac-2 cells can be inhibited by an E-cadherin antibody blocking specifically homophilic E-cadherin interactions between adjacent cell surfaces. Altogether, these results suggest that atm could participate in a molecular pathway linking extracellular signalling to cell cycle control and may help further clarify the role of Atm in epithelial cell biology and carcinogenesis.