Wnt and Notch1 signaling pathways play an important role in a variety of biological processes including embryonic induction, the polarity of cell division, cell fate, and cell growth. Although there is evidence that the two main signaling pathways can modulate each other, the precise mechanism is not completely understood. This report shows that beta-catenin can regulate the level and transcriptional activity of the Notch1 and Notch1 intracellular domain (NICD). The in vivo and in vitro results demonstrate that beta-catenin binds with Notch1 and NICD, for which its Armadillo repeat domain is essential. It was further demonstrated that beta-catenin could upregulate the level of Notch1 and NICD, possibly by competing the common ubiquitin-dependent degradation machinery. In addition, beta-catenin enhanced the transcriptional activity of NICD on the hairy and enhancer of split 1 (HES1) and CSL through its C-terminal transactivation domain. This effect of cooperative regulation by beta-catenin could also be observed in bone morphogenetic protein 2 (BMP2) induced osteogenic differentiation of C2C12 cells. beta-catenin coexpression with NICD enhanced the alkaline phosphatase (ALP) activity in C2C12 cells compared with either beta-catenin or NICD expression alone. Culturing C2C12 cells on Delta-1 coated dishes together with Wnt3-conditioned media induced noticeable increases in ALP staining, verifying that employed physiological levels of NICD and beta-catenin are sufficient to induce ALP activation. Furthermore, effects of beta-catenin on Notch1 were dramatically diminished by overexpressed LEF1. Overall, our data suggest that beta-catenin can act as a switching molecule between the classical TCF/LEF1 mediated pathway and NICD mediated pathway.