During heart development endocardial cells within the atrio-ventricular (AV) region undergo TGFβ-dependent epithelial-mesenchymal transformation (EMT) and invade the underlying cardiac jelly. This process gives rise to the endocardial cushions from which AV valves and part of the septum originate. In this paper we show that in mouse embryos and in AV explants TGFβ induction of endocardial EMT is strongly inhibited in mice deficient for endothelial β-catenin, leading to a lack of heart cushion formation. Using a Wnt-signaling reporter mouse strain, we demonstrated in vivo and ex vivo that EMT in heart cushion is accompanied by activation of β-catenin/TCF/Lef transcriptional activity. In cultured endothelial cells, TGFβ2 induces α-smooth muscle actin (αSMA) expression. This process was strongly reduced in β-catenin null cells, although TGFβ2 induced smad phosphorylation was unchanged. These data demonstrate an involvement of β-catenin/TCF/Lef transcriptional activity in heart cushion formation, and suggest an interaction between TGFβ and Wnt-signaling pathways in the induction of endothelial-mesenchymal transformation.