␣-Catenin and -catenin link cadherins to the cytoskeleton at adherens junctions. -Catenin also associates with members of the T-cell factor (Tcf) family of transcription factors, and mutations in -catenin lead to activation of Tcf-dependent transcription and increased cell growth. Although the loss of ␣-catenin expression can also promote cell growth, the role of endogenous ␣-catenin in -catenin signaling is unclear. Here we show that loss of ␣-catenin expression in a colon cancer cell line correlates with increased Tcf-dependent transcription. The presence of ␣-catenin in colon cancer cell nuclei suggests that it inhibits transcription directly, and, in agreement with this, ectopic expression of ␣-catenin in the nucleus represses Tcf-dependent transcription. Furthermore, recombinant ␣-catenin disrupts the interaction between the -catenin⅐Tcf complex and DNA. We conclude that ␣-catenin inhibits -catenin signaling in the nucleus by interfering with the formation of a -catenin⅐Tcf⅐DNA complex.-Catenin has two separable functions; it is a component of the Wnt signal transduction pathway that results in axis formation and cell fate choice during embryonic development (1, 2), and it is part of the cadherin cell adhesion complex (3). The central armadillo repeat domain of -catenin is necessary for both of these functions, because it directly binds Tcf/LEF-1 1 family transcription factors to transduce Wnt signals and cadherins to promote cell-cell adhesion.In the current model of the Wnt signaling pathway, the cytosolic level of -catenin is controlled by phosphorylation and ubiquitin-dependent degradation. Wnt signals stabilize -catenin, allowing it to associate with Tcf/LEF-1 family members and enter the nucleus to regulate gene expression. -Catenin can also enter the nucleus independently, in a manner similar to that of the nuclear transport protein importin- (4, 5), suggesting that -catenin may be a specific importin for other proteins. Support for this comes from studies of Armadillo (the Drosophila homologue of -catenin), which co-imports the transcription factor Teashirt into the nucleus (6). Several tumor types harbor mutations in the genes encoding the tumor suppressor APC or -catenin. These mutations result in permanent activation of Wnt target genes because the -catenin⅐Tcf complex is no longer regulated by degradation of -catenin (7-9). Importantly, proteins that are not involved in -catenin stability can also regulate -catenin signaling. NEMO-like kinase, for example, inhibits the interaction between the -catenin⅐Tcf complex and DNA by phosphorylating Tcf/LEF proteins (10).␣-Catenin is another protein that can inhibit -catenin signaling independently of stabilizing mutations in -catenin or APC (11, 12). ␣-Catenin associates directly with -catenin (13, 14), linking cadherins to the actin cytoskeleton, an interaction that is essential for strong cell-cell adhesion (15, 16). The expression of ␣-catenin is often reduced during tumor progression (17), and several cancer-derived cell lines...