beta-Catenin plays essential roles in cell adhesion, by associating with cadherins, and as a signaling molecule, by interacting with the Tcf/LEF-1 family of transcription factors. In order to study the protein-protein interactions of beta-catenin in living cells, we fused it to green fluorescent protein (GFP). GFP-beta-catenin was incorporated into cell junctions but also accumulated in the nucleus, where it formed rod-like structures. The carboxyl-terminal armadillo repeats of GFP-beta-catenin were sufficient for nuclear localization, but formation of rods required the armadillo repeats and sequences in both the amino- and the carboxyl-terminal domains. Rod formation was prevented by coexpression of N-cadherin, APC, and Tcf-4, which bind to the armadillo repeats of beta-catenin, but not by coexpression of alpha-catenin, although alpha-catenin expression did prevent accumulation of beta-catenin in the nucleus. Interestingly, when alpha-catenin, beta-catenin, and Tcf-4 were coexpressed they colocalized in the nucleus, and this correlated with a decrease in beta-catenin/Tcf-dependent transcriptional activity. These results indicate that binding of beta-catenin to Tcf-4 overrides the function of alpha-catenin to sequester beta-catenin in the cytoplasm and suggest that alpha-catenin can regulate beta-catenin signaling in the nucleus.