Beta-catenin is the central signalling molecule of the canonical Wnt pathway, where it activates target genes in a complex with lymphoid enhancer factor/T-cell factor transcription factors in the nucleus. The regulation of beta-catenin activity is thought to occur via a cytoplasmatic multiprotein complex that includes the serine/threonine kinase glycogen synthase kinase-3beta (GSK-3beta) that phosphorylates beta-catenin, marking it for degradation by the proteasome. Here, we provide evidence showing that GSK-3beta has a nuclear function in downregulating the activity of beta-catenin. Using colorectal cell lines that express a mutant form of beta-catenin, which cannot be phosphorylated by GSK-3beta and ectopically expressed mutant beta-catenin protein, we show that nuclear GSK-3beta functions in a mechanism that does not involve beta-catenin phosphorylation to reduce the levels of Wnt signalling. We show that GSK-3beta enters the nucleus, forms a complex with beta-catenin and lowers the levels of beta-catenin/TCF-dependent transcription in a mechanism that involves GSK-3beta-Axin binding.