β-catenin plays a role in intracellular adhesion and regulating gene expression. The latter role is associated with its oncogenic properties. Phosphorylation of β-catenin controls its intracellular expression but mechanism/s that regulates the nuclear localization of β-catenin is unknown. We demonstrate that O-GlcNAc glycosylation (O-GlcNAcylation) of β-catenin negatively regulates its levels in the nucleus. We show that normal prostate cells (PNT1A) have significantly higher amounts of O-GlcNAcylated β-catenin compared to prostate cancer (CaP) cells. The total nuclear levels of β-catenin are higher in the CaP cells than PNT1A but only a minimal fraction of the nuclear β-catenin in the CaP cells are O-GlcNAcylated. Increasing the levels of O-GlcNAcylated β-catenin in the CaP cells with PUGNAc (O- (2-acetamido-2-deoxy-d-gluco-pyranosylidene) amino-N-phenylcarbamate) treatment is associated with a progressive decrease in the levels of β-catenin in the nucleus. TOPFlash reporter assay and mRNA expressions of β-catenin's target genes indicate that O-GlcNAcylation of β-catenin results in a decrease in its transcriptional activity. We define a novel modification of β-catenin that regulates its nuclear localization and transcriptional function.