Activation of beta-catenin/T cell factor (TCF) transcription as a result of mutations in the adenomatous polyposis coli (APC) and/or beta-catenin genes occurs in the majority of colon tumors. An increasing number of genes, including c-myc and cyclin D1, have been implicated as targets of this pathway. We now report that the dominant negative helix-loop-helix regulator Id2 is also a target of the beta-catenin/TCF transcription pathway in colon adenocarcinoma. Investigation of the mechanism for the overexpression of Id2 in colon carcinoma cells demonstrated that the Id2 promoter is activated, and the Id2 protein is up-regulated by beta-catenin. Conversely, reducing free beta-catenin blocked this induction of promoter activity. We have also used an electrophoretic mobility shift assay and supershift to identify a motif in the Id2 promoter that binds to TCF4 protein. Site-directed mutagenesis of this motif abolished promoter reporter activity. Both transfection of Id2 into SW480 cells and induction of Id2 in HT29 colon cells was found to increase anchorage-independent survival of these cells. Growing evidence associates disruption to Id2 expression with tumorigenesis, and our findings suggest that this dysregulation of Id2 expression is due to the activation of the beta-catenin/TCF pathway.