The nuclear receptors liver X receptor (LXR) alpha and LXRbeta serve as oxysterol receptors and play an important role in the regulation of lipid metabolism. We investigated the potential effects of LXRs on pathways of colon carcinogenesis and found that LXR activation suppresses the transactivation activity of beta-catenin, a key molecule in Wnt signaling. LXRalpha and LXRbeta inhibited beta-catenin transactivation of T cell factor-mediated transcription in a ligand-dependent manner. LXR activation suppressed an oncogenic beta-catenin, which has phosphorylation site mutations, and did not change beta-catenin protein expression in cells. In contrast, beta-catenin enhanced LXR transactivation activity. Nuclear LXRs and beta-catenin were coimmunoprecipitated in colon cancer HCT116 cells, and in vitro experiments showed that LXRs bind directly to the Armadillo repeat region of beta-catenin in a ligand-independent manner. LXR ligand decreased mRNA expression of beta-catenin targets, MYC, MMP7 and BMP4, and recruited LXRs to MYC and MMP7 promoters. Transfection of a dominant negative LXR to HCT116 cells and experiments using LXR-null cells showed the involvement of cellular LXRs in beta-catenin suppression and proliferation inhibition. The results show lipid-sensing receptor LXRs regulate the beta-catenin activity and cellular proliferation.