Signaling through the Wnt/β-catenin pathway is a crucial determinant of hepatic zonal gene expression, liver development, regeneration, and tumorigenesis. Transgenic mice with hepatocyte-specific knockout of Ctnnb1 (encoding β-catenin) have proven their usefulness in elucidating these processes. We now found that a small number of hepatocytes escape the Cre-mediated gene knockout in that mouse model. The remaining β-catenin-positive hepatocytes showed approximately 25% higher cell volumes compared to the β-catenin-negative cells and exhibited a marker protein expression profile similar to that of normal perivenous hepatocytes or hepatoma cells with mutationally activated β-catenin. Surprisingly, the expression pattern was observed independent of the cell's position within the liver lobule, suggesting a malfunction of physiological periportal repression of perivenously expressed genes in β-catenin-deficient liver. Clusters of β-catenin-expressing hepatocytes lacked expression of the gap junction proteins Connexin 26 and 32. Nonetheless, β-catenin-positive hepatocytes had no striking proliferative advantage, but started to grow out on treatment with phenobarbital, a tumor-promoting agent known to facilitate the formation of mouse liver adenoma with activating mutations of Ctnnb1. Progressive re-population of Ctnnb1 knockout livers with wild-type hepatocytes was seen in aged mice with a pre-cirrhotic phenotype. In these large clusters of β-catenin-expressing hepatocytes, perivenous-specific gene expression was re-established. In summary, our data demonstrate that the zone-specificity of a hepatocyte's gene expression profile is dependent on the presence of β-catenin, and that β-catenin provides a proliferative advantage to hepatocytes when promoted with phenobarbital, or in a pre-cirrhotic environment.