Inactivation of the adenomatous polyposis coli (APC) gene is a critical event in the development of human colorectal cancers. At the biochemical level, several functions have been assigned to the multidomain APC protein, but the cellular effects of APC expression and how they relate to its biochemical functions are less well defined. To address these issues, we generated a recombinant adenovirus (Ad-CBR) that constitutively expresses the central third of APC, which includes all of the known beta-catenin binding repeats. When expressed in colon cancer cells, Ad-CBR blocked the nuclear translocation of beta-catenin and inhibited beta-catenin/Tcf-4-mediated transactivation. Accordingly, expression of endogenous targets of the APC/beta-catenin/Tcf-4 pathway was down-regulated. Ad-CBR infection of colorectal cancer cell lines with mutant APC but wild-type beta-catenin resulted in substantial growth arrest followed by apoptosis. These effects were attenuated in lines with wild-type APC but with mutated beta-catenin. These findings suggest that the beta-catenin-binding domain in the central third of APC is sufficient for its tumor suppressor activity.