The wnt signal transduction pathway is involved in many differentiation events during embryonic development and can lead to tumor formation after aberrant activation of its components. The cytoplasmic component beta-catenin is central to the transmission of wnt signals to the nucleus: in the absence of wnts beta-catenin is constitutively degraded in proteasomes, whereas in the presence of wnts beta-catenin is stabilized and associates with HMG box transcription factors of the LEF/TCF family. In tumors, beta-catenin degradation is blocked by mutations of the tumor suppressor gene APC (adenomatous polyposis coli), or of beta-catenin itself. As a consequence, constitutive TCF/beta-catenin complexes are formed and activate oncogenic target genes. This review discusses the mechanisms that silence the pathway in cells that do not receive a wnt signal and goes on to describe the regulatory steps involved in the activation of the pathway.