δ-Catenin is an Armadillo protein of the p120-catenin subfamily capable of modulating cadherin stability, small GTPase activity, and nuclear transcription. From yeast two-hybrid screening of a human embryonic stem cell cDNA library, we identified δ-catenin as a potential interacting partner of the caspase-3 protease, which plays essential roles in apoptotic as well as non-apoptotic processes. Interaction of δ-catenin with caspase-3 was confirmed using cleavage assays conducted in vitro, in Xenopus apoptotic extracts, and in cell line chemically induced contexts. The cleavage site, a highly conserved caspase consensus motif (DELD) within Armadillo repeat 6 of δ-catenin, was identified through peptide sequencing. Cleavage thus generates an amino-terminal (residues 1-816) and carboxyl-terminal (residues 817-1314) fragment, each containing about half of the central Armadillo domain. We found that cleavage of δ-catenin both abolishes its association with cadherins and impairs its ability to modulate small GTPases. Interestingly, 817-1314 possesses a conserved putative nuclear localization signal that may facilitate the nuclear targeting of δ-catenin in defined contexts. To probe for novel nuclear roles of δ-catenin, we performed yeast two-hybrid screening of a mouse brain cDNA library, resolving and then validating interaction with an uncharacterized KRAB family zinc finger protein, ZIFCAT. Our results indicate that ZIFCAT is nuclear and suggest that it may associate with DNA as a transcriptional repressor. We further determined that other p120 subfamily catenins are similarly cleaved by caspase-3 and likewise bind ZIFCAT. Our findings potentially reveal a simple yet novel signaling pathway based upon caspase-3 cleavage of p120-catenin subfamily members, facilitating the coordinate modulation of cadherins, small GTPases, and nuclear functions.