Cadherins are homophilic cell-cell adhesion molecules implicated in many fundamental processes, such as morphogenesis, cell growth, and differentiation. They accumulate at cell-cell contact sites and assemble into large macromolecular complexes named adherens junctions (AJs). Cadherin targeting and function are regulated by various cellular processes, many players of which remain to be uncovered. Here we identify the small GTPase Rab35 as a new regulator of cadherin trafficking and stabilization at cell-cell contacts in C2C12 myoblasts and HeLa cells. We find that Rab35 accumulates at cell-cell contacts in a cadherin-dependent manner. Knockdown of Rab35 or expression of a dominant-negative form of Rab35 impaired N- and M-cadherin recruitment to cell-cell contacts, their stabilization at the plasma membrane, and association with p120 catenin and led to their accumulation in transferrin-, clathrin-, and AP-2-positive intracellular vesicles. We also find that Rab35 function is required for PIP5KIgamma accumulation at cell-cell contacts and phosphatidyl inositol 4,5-bisphosphate production, which is involved in cadherin stabilization at contact sites. Finally, we show that Rab35 regulates myoblast fusion, a major cellular process under the control of cadherin-dependent signaling. Taken together, these results reveal that Rab35 regulates cadherin-dependent AJ formation and myoblast fusion.