Mutations resulting in the truncation of the adenomatous polyposis coli (APC) protein are common to most colonic tumours. The APC protein has emerged as a multifunctional protein that contributes to cytoskeletal organisation and is involved in the regulation of beta-catenin. Both, changes in transcription due to increases in beta-catenin, as well as defects in directed cell migration and cell division contribute to cancer when APC is mutated. Little is known about how separate functions of APC are coordinated. In this study, we identified two distinct soluble protein pools containing APC. We found that one of these pools represents the fully assembled beta-catenin-targeting complex. The second pool contained at least two different forms of APC: APC that was bound to partially assembled beta-catenin-targeting complexes and APC that could bind microtubules. Consistent with the previously proposed role for glycogen synthase kinase 3beta (GSK3beta) in modulating the assembly and activity of the beta-catenin-targeting complex, formation of the fully assembled complex was reduced by inhibitors of GSK3beta. Similarly, tumour cells with truncated APC only contained the partially assembly beta-catenin-targeting complex. We also found that highly elevated levels of beta-catenin in tumour cells containing wild-type APC correlated with a decrease in the ability of the endogenous APC protein to bind microtubules. Additionally, APC lacking the direct microtubule binding site was more effective at downregulating beta-catenin. Together, our data suggest that the interaction of APC with microtubules and the beta-catenin-targeting complex are mutually exclusive, and indicate that the distribution of endogenous APC between different pools is dynamic, which allows cells to distribute it as required.