To investigate the role of β-catenin in mammary gland development and neoplasia, we expressed a stabilized, transcriptionally active form of β-catenin lacking the NH₂-terminal 89 amino acids (ΔN89β-catenin) under the control of the mouse mammary tumor virus long terminal repeat. Our results show that ΔN89β-catenin induces precocious lobuloalveolar development and differentiation in the mammary glands of both male and female mice. Virgin ΔN89β-catenin mammary glands resemble those found in wild-type (wt) pregnant mice and inappropriately express cyclin D1 mRNA. In contrast to wt mammary glands, which resume a virgin appearance after cessation of lactation, transgenic mammary glands involute to a midpregnant status. All transgenic females develop multiple aggressive adenocarcinomas early in life. Surprisingly, the ΔN89β-catenin phenotype differs from those elicited by overexpression of Wnt genes in this gland. In particular, ΔN89β-catenin has no effect on ductal side branching. This suggests that Wnt induction of ductal branching involves additional downstream effectors or modulators.