Adherens junctions (AJs), together with tight junctions (TJs), form an apical junctional complex that regulates intestinal epithelial cell-to-cell adherence and barrier homeostasis. Within the AJ, membrane-bound E-cadherin binds β-catenin, which functions as an essential intracellular signaling molecule. We have previously identified a novel protein in the region of the apical junction complex, chloride channel protein-2 (ClC-2), that we have used to study TJ regulation. In this study, we investigated the possible effects of ClC-2 on the regulation of AJs in intestinal mucosal epithelial homeostasis and tumorigenicity. Mucosal homeostasis and junctional proteins were examined in wild-type (WT) and ClC-2 knockout (KO) mice as well as associated colonoids. Tumorigenicity and AJ-associated signaling were evaluated in a murine colitis-associated tumor model and in a colorectal cancer cell line (HT-29). Colonic tissues from ClC-2 KO mice had altered ultrastructural morphology of intercellular junctions with reduced colonocyte differentiation, whereas jejunal tissues had minimal changes. Colonic crypts from ClC-2 KO mice had significantly higher numbers of less-differentiated forms of colonoids compared with WT. Furthermore, the absence of ClC-2 resulted in redistribution of AJ proteins and increased β-catenin activity. Downregulation of ClC-2 in colorectal cells resulted in significant increases in proliferation associated with disruption of AJs. Colitis-associated tumors in ClC-2 KO mice were significantly increased, associated with β-catenin transcription factor activation. The absence of ClC-2 results in less differentiated colonic crypts and increased tumorigenicity associated with colitis via dysregulation of AJ proteins and activation of β-catenin-associated signaling. NEW & NOTEWORTHY Disruption of adherens junctions in the absence of chloride channel protein-2 revealed critical functions of these junctional structures, including maintenance of colonic homeostasis and differentiation as well as driving tumorigenicity by regulating β-catenin signaling.