Phosphorylation on a serine or threonine residue preceding proline (Ser/Thr-Pro) is a key regulatory mechanism, and the conformation of certain phosphorylated Ser/Thr-Pro bonds is regulated specifically by the prolyl isomerase Pin1. Whereas the inhibition of Pin1 induces apoptosis, Pin1 is strikingly overexpressed in a subset of human tumours. Here we show that Pin1 regulates beta-catenin turnover and subcellular localization by interfering with its interaction with adenomatous polyposis coli protein (APC). A differential-display screen reveals that Pin1 increases the transcription of several beta-catenin target genes, including those encoding cyclin D1 and c-Myc. Manipulation of Pin1 levels affects the stability of beta-catenin in vitro. Furthermore, beta-catenin levels are decreased in Pin1-deficient mice but are increased and correlated with Pin1 overexpression in human breast cancer. Pin1 directly binds a phosphorylated Ser-Pro motif next to the APC-binding site in beta-catenin, inhibits its interaction with APC and increases its translocation into the nucleus. Thus, Pin1 is a novel regulator of beta-catenin signalling and its overexpression might contribute to the upregulation of beta-catenin in tumours such as breast cancer, in which APC or beta-catenin mutations are not common.