CEACAM1 is a cell-cell adhesion molecule that mediates homophilic cell adhesion. In addition, CEACAM1 was also shown to suppress the growth of prostate, breast, and colon tumors. Structural and functional analyses showed that the adhesion activity of CEACAM1 is mediated by its extracellular domain while its cytoplasmic domain is necessary and sufficient for growth-inhibitory activity. The signal pathways leading to CEACAM1-mediated growth suppression are not known. We studied the importance of phosphorylation of serine 503 in this growth-inhibitory signaling pathway. Full-length CEACAM1 was found to be phosphorylated in vivo in both tyrosine and serine residues. Mutation of tyrosine 488 to phenylalanine did not abolish the tumor-suppressive activity of CEACAM1, suggesting that phosphorylation at tyrosine 488 is not critical for CEACAM1's tumor-suppressive activity. Although expression of CEACAM1's cytoplasmic domain inhibited the growth of DU145 prostate cancer cells in vivo, mutation of serine 503 to alanine abolished the growth-inhibitory activity. In addition, the change of serine 503 to aspartic acid produced tumor-suppressive activity similar to that of the wild-type CEACAM1. These results suggested that phosphorylation at serine 503 is essential for CEACAM1's growth-inhibitory function in vivo.