During 3T3L1 adipogenesis there is a marked reduction in beta-catenin and N-Cadherin expression with a relatively small decrease in p120 catenin protein levels. Cell fractionation demonstrated a predominant decrease in the particulate (membrane bound) pool of p120 catenin with little effect on the soluble pool, resulting in a large redistribution from the plasma membrane to the cytosol. Re-expression of p120 catenin inhibited constitutive (transferrin receptor) and regulated mannose-6-phosphate receptor and GLUT4 trafficking to the plasma membrane. The inhibition of membrane trafficking was specific for p120 catenin function as this could be rescued by co-expression of N-Cadherin. Moreover, overexpression of a p120 catenin deletion mutant (p120622-628) or splice variant (p120-4A), neither of which can regulate Rho or Rac activity, showed any significant effect. The inhibition of GLUT4 translocation was also observed upon the simultaneous expression of a constitutively active Rac mutant (Rac1/V12) in combination with a dominant-interfering Rho mutant (RhoA/N19). This was recapitulated by expression of the Rho ADP ribosylation factor (C3ADP) in combination with constitutively active Rac1/V12. Moreover, siRNA mediated knockdown of p120 catenin resulted in increased basal state accumulation of GLUT4 at the plasma membrane. Together, these data demonstrate that p120 catenin plays an important role in maintaining the basal tone of membrane protein trafficking in adipocytes through the dual regulation of Rho and Rac function and accounts for reports implicating Rho or Rac in the control of GLUT4 translocation.