Controlled regulation of cell proliferation and differentiation is essential for embryonic development and requires the coordinated regulation of cell-cell adhesion and gene transcription. The armadillo repeat protein beta-catenin is an important integrator of both processes. Beta-catenin acts in the Wnt signaling pathway, activating the transcription of crucial target genes responsible for cellular proliferation and differentiation. Beta-catenin also controls E-cadherin-mediated cell adhesion at the plasma membrane and mediates the interplay of adherens junction molecules with the actin cytoskeleton. Both functions of beta-catenin are de-regulated in human malignancies, thereby leading both to the loss of cell-cell adhesion and to the increased transcription of Wnt target genes.