The formation of a complex between beta-catenin and members of the TCF/LEF family of high-mobility group proteins is a key regulatory event in the wnt-signaling pathway, essential for embryonal development as well as the growth of normal and malignant colon epithelium. We have characterized the binding of TCF4 to human beta-catenin by steady-state intrinsic fluorescence quenching experiments, surface plasmon resonance (SPR) and isothermal titration calorimetry (ITC). Binding studies in solution and in heterogeneous phase showed that TCF4 binds reversibly to beta-catenin with an affinity (KB) of 3(+/-1) 10(8) M(-1). Site-directed mutagenesis, together with calorimetric measurements, revealed that residue D16 in TCF4 plays a crucial role in high-affinity binding. Mutation of this residue to alanine resulted in a decrease of KB by two orders of magnitude as well as a significant reduction in binding enthalpy. Binding of TCF4 to beta-catenin gave rise to a large negative enthalpy change at 25 degrees C (-29.7 kcal/mol). Binding enthalpies were strongly temperature dependent, which resulted in the determination of a large heat capacity change upon binding of -1.5 kcal/(mol K). The molecular events that take place upon complex formation are discussed using the measured thermodynamic data together with the crystal structure of the beta-catenin arm repeat region/TCF complex.