Mouse mammary epithelial cells expressing a fusion protein of c-Fos and the estrogen receptor (FosER) formed highly polarized epithelial cell sheets in the absence of estradiol. β-Catenin and p120^ctn were exclusively located at the lateral plasma membrane in a tight complex with the adherens junction protein, E-cadherin. Upon activation of FosER by estradiol addition, cells lost epithelial polarity within two days, giving rise to a uniform distribution of junctional proteins along the entire plasma membrane. Most of the β-catenin and p120^ctn remained in a complex with E-cadherin at the membrane, but a minor fraction of uncomplexed cytoplasmic β-catenin increased significantly. The epithelial–mesenchymal cell conversion induced by prolonged estradiol treatment was accompanied by a complete loss of E-cadherin expression, a 70% reduction in β-catenin protein level, and a change in the expression pattern of p120^ctn isoforms. In these mesenchymal cells, β-catenin and p120^ctn were localized in the cytoplasm and in defined intranuclear structures. Furthermore, β-catenin colocalized with transcription factor LEF-1 in the nucleus, and coprecipitated with LEF-1–related proteins from cell extracts. Accordingly, β-catenin–dependent reporter activity was upregulated in mesenchymal cells and could be reduced by transient expression of exogenous E-cadherin. Thus, epithelial mesenchymal conversion in FosER cells may involve β-catenin signaling.