Hereditary diffuse gastric cancer is a cancer syndrome caused by germline mutations in the gene for the cell adhesion protein E-cadherin (CDH1). E-cadherin plays a central role in the maintenance of cell polarity and its loss during tumorigenesis is associated with poorly differentiated cancers and a poor prognosis. Hereditary diffuse gastric cancer is dominated by diffuse-type gastric adenocarcinoma, often with signet ring cell morphology. Large numbers of stage T1a signet ring cell carcinomas exist in the stomachs of CDH1 mutation carriers from a young age, and these foci sometimes show enrichment to the transition zone between the body and antrum. Generally these signet ring cell carcinomas are hypoproliferative, lack Wnt pathway activation, and are relatively indolent. However, a small proportion of the T1a foci contain cells that are poorly differentiated, display mesenchymal features, and express activated c-Src and its downstream targets. These same features are observed in more advanced stages of hereditary diffuse gastric cancer progression, suggesting that an epithelial-mesenchymal transition is required for tumor invasion beyond the muscularis mucosae. Hereditary diffuse gastric cancer initiation requires somatic down-regulation of the second CDH1 allele, which in most cases is caused by DNA promoter hypermethylation. Subsequent to CDH1 down-regulation, lost polarity in gastric stem or progenitor cells would be predicted to interfere with mitotic spindle orientation and the segregation of cell fate determinants. We predict that this disruption of cell division results in daughter cells being deposited in the lamina propria where their population expands and partially differentiates, resulting in the formation of foci of signet ring cells.