Contact inhibition of cell movement and proliferation is critical for proper organogenesis and tissue remodeling. We show here a novel regulatory mechanism for this contact inhibition using cultured vascular endothelial cells. When the cells were confluently cultured, Necl-4 was up-regulated and localized at cell-cell contact sites where it cis-interacted with the vascular endothelial growth factor (VEGF) receptor. This interaction inhibited the tyrosine-phosphorylation of the VEGF receptor through protein-tyrosine phosphatase, non-receptor type 13 (PTPN13), eventually reducing cell movement and proliferation. When the cells were sparsely cultured, Necl-4 was down-regulated but accumulated at leading edges where it inhibited the activation of Rho-associated protein kinase through PTPN13, eventually facilitating the VEGF-induced activation of Rac1 and enhancing cell movement. Necl-4 further facilitated the activation of extracellular signal-regulated kinase 1/2, eventually enhancing cell proliferation. Thus, Necl-4 serves as a novel regulator for contact inhibition of cell movement and proliferation cooperatively with the VEGF receptor and PTPN13.