The Wnt/β-catenin signaling pathway plays important roles in the progression of colon cancer. DACT1 has been identified as a modulator of Wnt signaling through its interaction with Dishevelled (Dvl), a central mediator of both the canonical and noncanonical Wnt pathways. However, the functions of DACT1 in the WNT/β-catenin signaling pathway remain unclear. Here, we present evidence that DACT1 is an important positive regulator in colon cancer through regulating the stability and sublocation of β-catenin. We have shown that DACT1 promotes cancer cell proliferation in vitro and tumor growth in vivo and enhances the migratory and invasive potential of colon cancer cells. Furthermore, the higher expression of DACT1 not only increases the nuclear and cytoplasmic fractions of β-catenin, but also increases its membrane-associated fraction. The overexpression of DACT1 leads to the increased accumulation of nonphosphorylated β-catenin in the cytoplasm and particularly in the nuclei. We have demonstrated that DACT1 interacts with GSK-3β and β-catenin. DACT1 stabilizes β-catenin via DACT1-induced effects on GSK-3β and directly interacts with β-catenin proteins. The level of phosphorylated GSK-3β at Ser9 is significantly increased following the elevated expression of DACT1. DACT1 mediates the subcellular localization of β-catenin via increasing the level of phosphorylated GSK-3β at Ser9 to inhibit the activity of GSK-3β. Taken together, our study identifies DACT1 as an important positive regulator in colon cancer and suggests a potential strategy for the therapeutic control of the β-catenin-dependent pathway.