Engagement of vascular endothelial (VE)-cadherin leads to the cessation of proliferation commonly known as 'contact inhibition'. We show that VE-cadherin inhibits growth by mediating changes in cell adhesion to the extracellular matrix. Increasing cell-cell contact decreased cell spreading and proliferation, which was reversed by blocking engagement of VE-cadherin. Using a new system to prevent the cadherin-induced changes in cell spreading, we revealed that VE-cadherin paradoxically increased proliferation. Treating cells with inhibitors of PKC and MEK abrogated the stimulatory signal at concentrations that disrupted the formation of actin fibers across the cell-cell contact. Directly disrupting actin fibers, blocking actin-myosin-generated tension, or inhibiting signaling through Rho specifically inhibited the cadherin-induced proliferative signal. By progressively altering the degree to which cell-cell contact inhibited cell spreading, we show that cell-cell contact ultimately increased or decreased the overall proliferation rate of the population by differentially shifting the balance between the two opposing proliferative cues. The existence of opposing growth signals induced by VE-cadherin that are both mediated through crosstalk with cytoskeletal structure highlights the complex interplay of mechanical and chemical signals with which cells navigate in their physical microenvironment.