Mutational inactivation of the APC gene is a key early event in the development of familial adenomatous polyposis and colon cancer. APC suppresses tumour progression by promoting degradation of the oncogenic transcriptional activator beta-catenin. APC gene mutations can lead to abnormally high levels of beta-catenin in the nucleus, and the consequent activation of transforming genes. Here, we show that APC is a nuclear-cytoplasmic shuttling protein, and that it can function as a beta-catenin chaperone. APC contains two active nuclear export sequences (NES) at the amino terminus, and mutagenesis of these conserved motifs blocks nuclear export dependent on the CRM1 export receptor. Treatment of cells with the CRM1-specific export inhibitor leptomycin B shifts APC from cytoplasm to nucleus. beta-catenin localization is also regulated by CRM1, but in an APC-dependent manner. Transient expression of wild-type APC in SW480 (APCmut/mut) colon cancer cells enhances nuclear export and degradation of beta-catenin, and these effects can be blocked by mutagenesis of the APC NES. These findings suggest that wild-type APC controls the nuclear accumulation of beta-catenin by a combination of nuclear export and cytoplasmic degradation.