Loss of expression of the cell–cell adhesion molecule E‐cadherin is a hallmark of epithelial–mesenchymal transition (EMT) in development and in the progression from epithelial tumours to invasive and metastatic cancers. Here, we demonstrate that the loss of E‐cadherin function upregulates expression of the neuronal cell adhesion molecule (NCAM). Subsequently, a subset of NCAM translocates from fibroblast growth factor receptor (FGFR) complexes outside lipid rafts into lipid rafts where it stimulates the non‐receptor tyrosine kinase p59^Fyn leading to the phosphorylation and activation of focal adhesion kinase and the assembly of integrin‐mediated focal adhesions. Ablation of NCAM expression during EMT inhibits focal adhesion assembly, cell spreading and EMT. Conversely, forced expression of NCAM induces epithelial cell delamination and migration, and high NCAM expression correlates with tumour invasion. These results establish a mechanistic link between the loss of E‐cadherin expression, NCAM function, focal adhesion assembly and cell migration and invasion.