Epithelial cell-cell junctions are specialised structures connecting individual cells in epithelial tissues. They are dynamically and functionally linked to the actin cytoskeleton. Disassembly of these junctions is a key event during physiological and pathological processes, but how this influences gene expression is largely uncharacterised. Here, we investigate whether junction disassembly regulates transcription by serum response factor (SRF) and its coactivator MAL/MRTF. Ca2+-dependent dissociation of epithelial integrity was found to correlate strictly with SRF-mediated transcription. In cells lacking E-cadherin expression, no SRF activation was observed. Direct evidence is provided that signalling occurs via monomeric actin and MAL. Dissociation of epithelial junctions is accompanied by induction of RhoA and Rac1. However, using clostridial cytotoxins, we demonstrate that Rac, but not RhoA, is required for SRF and target gene induction in epithelial cells, in contrast to serum-stimulated fibroblasts. Actomyosin contractility is a prerequisite for signalling but failed to induce SRF activation, excluding a sufficient role of the Rho-ROCK-actomyosin pathway. We conclude that E-cadherin-dependent cell-cell junctions facilitate transcriptional activation via Rac, G-actin, MAL and SRF upon epithelial disintegration.