Deubiquitinating enzymes (DUBs) are involved in the regulation of distinct critical cellular processes. Ubiquitin C-terminal Hydrolase L1 (UCH L1) has been linked to several neurological diseases as well as human cancer, but the physiological targets and the regulation of UCH L1 expression in vivo have been largely unexplored. Here we demonstrate that UCH L1 up-regulates beta-catenin/TCF signaling: UCH L1 forms endogenous complexes with beta-catenin, stabilizes it and up-regulates beta-catenin/TCF-dependent transcription. We also show that, reciprocally, beta-catenin/TCF signaling up-regulates expression of endogenous UCH L1 mRNA and protein. Moreover, using ChIP assay and direct mutagenesis we identify two TCF4-binding sites on the uch l1 promoter that are involved in this regulation. Since the expression and deubiquitinating activity of UCH L1 are required for its own basic promoter activity, we propose that UCH L1 up-regulates its expression by activation of the oncogenic beta-catenin/TCF signaling in transformed cells.