To clarify the molecular mechanisms of human carcinogenesis associated with abnormal beta-catenin/T-cell factor (Tcf) signaling, we have been using cDNA microarrays to search for genes whose expression is significantly altered after introduction of wild-type APC into SW480 colon cancer cells. These experiments identified a novel human gene, termed APCDD1, that was down-regulated in the cancer cells by exogenous wild-type APC; its expression was also reduced in response to transduction of AXIN1. Moreover, we documented elevated expression of APCDD1 in 18 of 27 primary colon cancer tissues compared with corresponding noncancerous mucosae. A reporter gene assay using the 5'-flanking region of APCDD1 indicated that transfection of beta-catenin together with wild-type Tcf4 into HeLa cells increased the reporter activity through two putative Tcf/lymphoid enhancer factor-binding motifs upstream of the transcription start site, indicating that APCDD1 is one of the direct targets of this transcription complex. Exogenous APCDD1 promoted growth of colon cancer cells both in vitro and in vivo, whereas transfection with antisense S-oligodeoxynucleotides decreased cell/tumor growth. These data suggest that APCDD1 is directly regulated by the beta-catenin/Tcf complex and that its elevated expression is likely to contribute to colorectal tumorigenesis.