E-cadherin-mediated cell-cell adhesion is frequently lost during the development of malignant epithelial cancers. Employing a transgenic mouse model of beta-cell carcinogenesis (Rip1Tag2) we have previously shown that the loss of E-cadherin is a rate-limiting step in the progression from adenoma to carcinoma. However, the mere loss of cell adhesion may not be sufficient and additional signals are required to cause tumor cells to permeate the basal membrane and to invade surrounding tissue. Besides being an important component of the E-cadherin cell-adhesion complex, beta-catenin plays a critical role in canonical Wnt signaling. We report here that beta-catenin-mediated Wnt signaling does not contribute to tumor progression in Rip1Tag2 mice. E-cadherin downregulates beta-catenin/Tcf-mediated transcriptional activity by sequestrating beta-catenin into E-cadherin cell-adhesion complexes even in the presence of activated Wnt signaling. Upon loss of E-cadherin expression, beta-catenin is degraded and Tcf/beta-catenin-mediated transcriptional activity is not induced. Moreover, forced expression of constitutive-active beta-catenin or genetic ablation of Tcf/beta-catenin transcriptional activity in tumor cells of Rip1Tag2 transgenic mice does not affect tumor progression. Together, the data indicate that signals other than beta-catenin/Tcf-mediated Wnt signaling are induced by the loss of E-cadherin during tumor progression in Rip1Tag2 transgenic mice.