Cell-cell adhesion regulates the development and function of epithelia by providing mechanical support and by guiding cell proliferation and differentiation. The tight junction (TJ) protein zonula occludens (ZO)-1 regulates cell proliferation and gene expression by inhibiting the activity of the Y-box transcription factor ZONAB in cultured epithelial cells. We investigated the role of this TJ-associated signalling pathway in the retinal pigment epithelium (RPE) in vivo by lentivirally-mediated overexpression of ZONAB, and knockdown of its cellular inhibitor ZO-1. Both overexpression of ZONAB or knockdown of ZO-1 resulted in increased RPE proliferation, and induced ultrastructural changes of an epithelial-mesenchymal transition (EMT)-like phenotype. Electron microscopy analysis revealed that transduced RPE monolayers were disorganised with increased pyknosis and monolayer breaks, correlating with increased expression of several EMT markers. Moreover, fluorescein angiography analysis demonstrated that the increased proliferation and EMT-like phenotype induced by overexpression of ZONAB or downregulation of ZO-1 resulted in RPE dysfunction. These findings demonstrate that ZO-1 and ZONAB are critical for differentiation and homeostasis of the RPE monolayer and may be involved in RPE disorders such as proliferative vitroretinopathy and atrophic age-related macular degeneration.