SGEF (also known as ARHGEF26), a RhoG specific GEF, can form a ternary complex with the Scribble polarity complex proteins Scribble and Dlg1, which regulates the formation and maintenance of adherens junctions and barrier function of epithelial cells. Notably, silencing SGEF results in a dramatic downregulation of both E-cadherin and ZO-1 (also known as TJP1) protein levels. However, the molecular mechanisms involved in the regulation of this pathway are not known. Here, we describe a novel signaling pathway governed by the Scribble-SGEF-Dlg1 complex. Our results show that the three members of the ternary complex are required to maintain the stability of the apical junctions, ZO-1 protein levels and tight junction (TJ) permeability. In contrast, only SGEF is necessary to regulate E-cadherin levels. The absence of SGEF destabilizes the E-cadherin-catenin complex at the membrane, triggering a positive feedback loop that exacerbates the phenotype through the repression of E-cadherin transcription in a process that involves the internalization of E-cadherin by endocytosis, β-catenin signaling and the transcriptional repressor Slug (also known as SNAI2).