Studies have demonstrated cross talk between β-catenin and peroxisome proliferator-activated receptor γ (PPARγ) signaling pathways. Specifically, activation of PPARγ induces the proteasomal degradation of β-catenin in cells that express an adenomatous polyposis coli-containing destruction complex. In contrast, oncogenic β-catenin is resistant to such degradation and inhibits the expression of PPARγ target genes. In the present studies, we demonstrate a functional interaction between β-catenin and PPARγ that involves the T-cell factor (TCF)/lymphocyte enhancer factor (LEF) binding domain of β-catenin and a catenin binding domain (CBD) within PPARγ. Mutation of K312 and K435 in the TCF/LEF binding domain of an oncogenic β-catenin (S37A) significantly reduces its ability to interact with and inhibit the activity of PPARγ. Furthermore, these mutations render S37A β-catenin susceptible to proteasomal degradation in response to activation of PPARγ. Mutation of F372 within the CBD (helices 7 and 8) of PPARγ disrupts its binding to β-catenin and significantly reduces the ability of PPARγ to induce the proteasomal degradation of β-catenin. We suggest that in normal cells, PPARγ can function to suppress tumorigenesis and/or Wnt signaling by targeting phosphorylated β-catenin to the proteasome through a process involving its CBD. In contrast, oncogenic β-catenin resists proteasomal degradation by inhibiting PPARγ activity, which requires its TCF/LEF binding domain.