The Dlg tumour suppressor protein is intimately involved in the control of cell contact and polarity. Previous studies have shown that hDlg is a target for a number of viral transforming proteins. In particular, the high risk human papillomavirus (HPV) E6 proteins target hDlg for proteasome-mediated degradation, an activity that appears to contribute to HPV-induced malignancy. However, little information is available concerning the normal regulation of hDlg. In this study we have investigated the role of the proteasome in the regulation of endogenous hDlg protein levels in epithelial cell lines. We demonstrate that hDlg is, indeed, degraded via the proteasome both in the presence and absence of HPV, in a fashion that is dependent on the ability of the cells to form cell junctions. By western blot and immunofluorescence analysis we show that hDlg is efficiently degraded in isolated cells; however, upon cell-cell contact, hDlg is both hyper-phosphorylated and stabilised. Strikingly, in both transformed rodent cells and undifferentiated cervical cancer cells, this ability to stabilise Dlg upon increased cell density is lost. These results demonstrate a complex pattern of hDlg regulation by phosphorylation and proteasome degradation in response to cell contact. Loss of this regulation probably represents a significant step in the development of malignancy.