Nitric oxide (NO.), an important mediator of inflammation, and beta-catenin, a component of the Wnt-adenomatous polyposis coli signaling pathway, contribute to the development of cancer. We have identified two T-cell factor 4 (Tcf-4)-binding elements (TBE1 and TBE2) in the promoter of human inducible NO synthase 2 (NOS2). We tested the hypothesis that beta-catenin regulates human NOS2 gene. Mutation in either of the two TBE sites decreased the basal and cytokine-induced NOS2 promoter activity in different cell lines. The promoter activity was significantly reduced when both TBE1 and TBE2 sites were mutated (P < 0.01). Nuclear extract from HCT116, HepG2, or DLD1 cells bound to NOS2 TBE1 or TBE2 oligonucleotides in electrophoretic mobility shift assays and the specific protein-DNA complexes were supershifted with anti-beta-catenin or anti-Tcf-4 antibody. Overexpression of beta-catenin and Tcf-4 significantly increased both basal and cytokine-induced NOS2 promoter activity (P < 0.01), and the induction was dependent on intact TBE sites. Overexpression of beta-catenin or Tcf-4 increased NOS2 mRNA and protein expression in HCT116 cells. Lithium chloride (LiCl), an inhibitor of glycogen synthase kinase-3beta, increased cytosolic and nuclear beta-catenin level, NOS2 expression, and NO. production in primary human and rat hepatocytes and cancer cell lines. Treatment with Wnt-3A-conditioned medium increased beta-catenin and NOS2 expression in fetal human hepatocytes. When administered in vivo, LiCl increased hepatic beta-catenin level in a dose-dependent manner with simultaneous increase in NOS2 expression. These data are consistent with the hypothesis that beta-catenin up-regulates NOS2 and suggest a novel mechanism by which the Wnt/beta-catenin signaling pathway may contribute to cancer by increasing NO. production.