The human DF3/MUC1 transmembrane protein is aberrantly expressed in multiple myeloma cells and other B cell malignancies. The regulation of MUC1 in B cells and its potential function as a signaling molecule are unknown. The present results demonstrate that interleukin-7 (IL-7) stimulates MUC1 expression in multiple myeloma cells. The results also demonstrate the IL-7 induces binding of MUC1 to the Lyn tyrosine kinase. The MUC1 C-terminal subunit binds directly to Lyn through interactions with the Lyn SH3 and SH2 domains. Activation of Lyn in response to IL-7 stimulation results in increased tyrosine phosphorylation of the MUC1 C-terminal subunit. In vitro and in vivo studies show that Lyn phosphorylates MUC1, at least in large part, on a YEKV site in the MUC1 cytoplasmic tail. The functional significance of the MUC1-Lyn interaction is supported by the demonstration that Lyn-mediated phosphorylation of MUC1 on YEKV induces binding of MUC1 and the beta-catenin signaling protein. In concert with these results, IL-7 treatment is associated with binding of MUC1 to beta-catenin and targeting of the MUC1-beta-catenin complex to the nucleus. These findings indicate that IL-7 regulates MUC1 expression and function in multiple myeloma cells.