PARsylation [poly(ADP-ribosyl)ation] of proteins is implicated in the regulation of diverse physiological processes. Tankyrase is a molecular scaffold with this catalytic activity and has been proposed as a regulator of vesicular trafficking on the basis, in part, of its Golgi localization in non-polarized cells. Little is known about tankyrase localization in polarized epithelial cells. Using MDCK (Madin-Darby canine kidney) cells as a model, we found that E-cadherin-mediated intercellular adhesion recruits tankyrase from the cytoplasm to the lateral membrane (including the tight junction), where it stably associates with detergent-insoluble structures. This recruitment is mostly completed within 8 h of calcium-induced formation of cell-cell contact. Conversely, when intercellular adhesion is disrupted by calcium deprivation, tankyrase returns from the lateral membrane to the cytoplasm and becomes more soluble in detergents. The PARsylating activity of tankyrase promotes its dissociation from the lateral membrane as well as its ubiquitination and proteasome-mediated degradation, resulting in an apparent protein half-life of approximately 2 h. Inhibition of tankyrase autoPARsylation using H2O2-induced NAD+ depletion or PJ34 [N-(6-oxo-5,6-dihydrophenanthridin-2-yl)-N,N-dimethylacetamide hydrochloride] treatment results in tankyrase stabilization and accumulation at the lateral membrane. By contrast, stabilization through proteasome inhibition results in tankyrase accumulation in the cytoplasm. These data suggest that cell-cell contact promotes tankyrase association with the lateral membrane, whereas PARsylating activity promotes translocation to the cytosol, which is followed by ubiquitination and proteasome-mediated degradation. Since the lateral membrane is a sorting station that ensures domain-specific delivery of basolateral membrane proteins, the regulated tankyrase recruitment to this site is consistent with a role in polarized protein targeting in epithelial cells.