Assembly of E-cadherin-based adherens junctions (AJ) is obligatory for establishment of polarized epithelia and plays a key role in repressing the invasiveness of many carcinomas. Here we show that type Igamma phosphatidylinositol phosphate kinase (PIPKIgamma) directly binds to E-cadherin and modulates E-cadherin trafficking. PIPKIgamma also interacts with the mu subunits of clathrin adaptor protein (AP) complexes and acts as a signalling scaffold that links AP complexes to E-cadherin. Depletion of PIPKIgamma or disruption of PIPKIgamma binding to either E-cadherin or AP complexes results in defects in E-cadherin transport and blocks AJ assembly. An E-cadherin germline mutation that loses PIPKIgamma binding and shows disrupted basolateral membrane targeting no longer forms AJs and leads to hereditary gastric cancers. These combined results reveal a novel mechanism where PIPKIgamma serves as both a scaffold, which links E-cadherin to AP complexes and the trafficking machinery, and a regulator of trafficking events via the spatial generation of phosphatidylinositol-4,5-bisphosphate.