Cadherins are cell adhesion proteins that are important for tissue formation and integrity. Cell-cell adhesion occurs through the formation of the strand-crossover dimer between identical cadherins on the surface of neighboring cells. The strand-crossover dimer forms exclusively between their EC1 domains via swapping of the βA sheet by undocking the conserved tryptophan 2, W2, from its own hydrophobic pocket and docking it into the hydrophobic pocket of its adhesive partner. An interesting aspect of the system is the fact that critical noncovalent interactions in the monomer re-form in the dimer. Thus, as these noncovalent interactions are conserved, what drives the formation of dimer? Moreover, why is dimer formation calcium-dependent? Thus, to probe the structural and energetic effects of calcium on the noncovalent interactions that are necessary for dimer formation, we performed spectroscopic, stability, and assembly studies of wild-type and two mutants, W2A and E89A, of neural (N-) cadherin. We find that while the ionic interaction involving E89 has a minimal effect on the general stability of the closed conformation of the βA sheet, the hydrophobic interaction involving W2 is the source of the calcium requirement for adhesive dimer formation. The binding of calcium creates strain in the W2-hydrophbic pocket interaction through direct connection of E11 at the C-terminus of the βA sheet to calcium. To overcome this unfavorable condition in the monomer, N-cadherin forms a dimer. Taken together, our data provide a thermodynamic basis for the calcium dependence of strand-crossover dimer formation in N-cadherin.