Dysregulation of beta-catenin is of importance to the development of diverse human malignancies. The MUC1 oncoprotein is aberrantly overexpressed by most human carcinomas and associates with beta-catenin. However, the functional significance of the MUC1-beta-catenin interaction is not known. Here, we show that MUC1 increases beta-catenin levels in the cytoplasm and nucleus of carcinoma cells. Previous studies have shown that glycogen synthase kinase 3beta (GSK3beta) phosphorylates beta-catenin and thereby targets it for proteosomal degradation. Consistent with the up-regulation of beta-catenin levels, our results show that MUC1 blocks GSK3beta-mediated phosphorylation and degradation of beta-catenin. To further define the interaction between MUC1 and beta-catenin, we identified a serine-rich motif (SRM) in the MUC1 cytoplasmic domain that binds directly to beta-catenin Armadillo repeats. Mutation of the SRM attenuated binding of MUC1 to beta-catenin and MUC1-mediated inhibition of beta-catenin degradation. Importantly, disruption of the MUC1-beta-catenin interaction with the SRM mutant also attenuated MUC1-induced anchorage-dependent and -independent growth and delayed MUC1-mediated tumorigenicity. These findings indicate that MUC1 promotes transformation, at least in part, by blocking GSK3beta-mediated phosphorylation and thereby degradation of beta-catenin.