The wnt signal transduction pathway is involved in various differentiation events during embryonic development and leads to tumor formation when aberrantly activated. The wnt signal is transmitted to the nucleus by the cytoplasmic component beta-catenin: in the absence of wnts, beta-catenin is constitutively degraded in proteasomes, whereas in the presence of wnts beta-catenin is stabilized and can associate with HMG box transcription factors of the LEF/TCF family. The LEF/TCF/beta-catenin complexes activate specific wnt target genes. In tumors, beta-catenin degradation is blocked by mutations of beta-catenin or of the tumor suppressor gene product APC. As a consequence, beta-catenin is stabilized, constitutive complexes with LEF/TCF factors are formed, and oncogenic target genes, such as c-myc, cyclin D1, and c-jun, are activated. Thus, control of beta-catenin is a major regulatory event in normal wnt signaling and during tumor formation. It has been found that a multiprotein complex assembled by the cytoplasmic component conductin induces degradation of cytoplasmic beta-catenin. The complex includes APC, the serine/threonine kinase GSK3 beta, and beta-catenin, which bind to conductin at distinct domains. In colon carcinoma cells, forced expression of conductin downregulates beta-catenin, whereas in normal cells mutants of conductin that are deficient in complex formation stabilize beta-catenin. Fragments of APC that contain a conductin-binding domain also block beta-catenin degradation. In Xenopus embryos, conductin inhibits the wnt pathway. In situ hybridization analysis shows that conductin is expressed in various embryonal tissues known to be regulated by wnts, such as the developing brain, mesenchyme below the epidermis, lung mesenchyme, and kidney. It is suggested that conductin controls wnt signaling by assembling the essential components of the beta-catenin degradation pathway. Alterations of conductin function may lead to tumor formation.