During epithelial‐mesenchymal transition (EMT) in cancer progression, tumor cells switch cadherin profile from E‐cadherin to cadherin‐11 (CDH11), which is accompanied by increased invasiveness and metastatic activity. However, the mechanism through which CDH11 may affect tumor growth and metastasis remains elusive. Here, we report that CDH11 was highly expressed in multiple human tumors and was localized on the membrane, in the cytoplasm and, surprisingly, also in the nucleus. Interestingly, β‐catenin remained bound to carboxy‐terminal fragments (CTFs) of CDH11, the products of CDH11 cleavage, and co‐localized with CTFs in the nucleus in the majority of breast cancer samples. Binding of β‐catenin to CTFs preserved β‐catenin activity, whereas inhibiting CDH11 cleavage led to β‐catenin phosphorylation and diminished Wnt signaling, similar to CDH11 knockout. Our data elucidates a previously unknown role of CDH11, which serves to stabilize β‐catenin in the cytoplasm and facilitate its translocation to the nucleus, resulting in activation of Wnt signaling, with subsequent increased proliferation, migration and invasion potential.