Mutated in colorectal cancer (MCC) was originally identified as a candidate gene for familial adenomatous polyposis (FAP) but further study identified adenomatous polyposis coli (APC) as responsible for FAP and the physiologic/pathologic roles of MCC remained poorly understood. Recently, MCC promoter methylation was discovered as a frequent early event in a distinct subset of precursor lesions and colorectal cancer (CRC) associated with the serrated CRC pathway. Here we provide the first evidence of the biological significance of MCC loss in CRC and the molecular pathways involved. We show MCC expression is dramatically decreased in many CRC cell lines and the distinct subset of sporadic CRC characterized by the CpG island methylator phenotype and BRAF(V600E) mutation due to promoter methylation as reported previously. Importantly, we find MCC interacts with beta-catenin and that reexpression of MCC in CRC cells specifically inhibits Wnt signaling, beta-catenin/T-cell factor/lymphoid-enhancer factor-dependent transcription and cellular proliferation even in the presence of oncogenic mutant APC. We also show that MCC is localized in the nucleus and identify two functional nuclear localization signals. Taken together, MCC is a nuclear, beta-catenin-interacting protein that can act as a potential tumor suppressor in the serrated CRC pathway by inhibiting Wnt/beta-catenin signal transduction.