Mutations in the adenomatous polyposis coli (APC) tumour-suppressor gene occur in most human colon cancers. Loss of functional APC protein results in the accumulation of β-catenin. Mutant forms of β-catenin have been discovered in colon cancersthat retain wild-type APC genes,, and also in melanomas, medulloblastomas, prostate cancer and gastric and hepatocellular, carcinomas. The accumulation of β-catenin activates genes that are responsive to transcription factors of the TCF/LEF family, with which β-catenin interacts^,,,,. Here we show that β-catenin activates transcription from the cyclin D1 promoter, and that sequences within the promoter that are related to consensus TCF/LEF-binding sites are necessary for activation. The oncoprotein p21^ras further activates transcription of the cyclin D1 gene, through sites within the promoter that bind the transcriptional regulators Ets or CREB. Cells expressing mutant β-catenin produce high levels of cyclin D1 messenger RNA and protein constitutively. Furthermore, expression of a dominant-negative form of TCF in colon-cancer cells strongly inhibits expression of cyclin D1 without affecting expression of cyclin D2, cyclin E, or cyclin-dependent kinases 2, 4 or 6. This dominant-negative TCF causes cells to arrest in the G1 phase of the cell cycle; this phenotype can be rescued by expression of cyclin D1 under the cytomegalovirus promoter. Abnormal levels of β-catenin may therefore contribute to neoplastic transformation by causing accumulation of cyclin D1.