High levels of beta-catenin and activating mutations in the beta-catenin gene (CTNNB1) have been demonstrated in malignant melanomas, implicating dysregulated Wnt signalling in the pathogenesis of this malignancy. We systematically examined melanoma cell lines for activating CTNNB1 mutations as well as genetic and epigenetic alterations of the adenomatous polyposis coli gene (APC), another key component of the Wnt signalling transduction pathway. Of 40 cell lines tested, one carried a truncating APC mutation and loss of the corresponding wild-type allele, and one carried a CTNNB1 missense mutation. Hypermethylation of APC promoter 1A was present in five of the cell lines (13%) and in nine of 54 melanoma biopsies (17%). Cells with truncating APC or activating CTNNB1 mutations showed increased transcription from endogenous and ectopic beta-catenin/T-cell factor (Tcf)-responsive target genes, consistent with the known effects of these alterations on beta-catenin stability and Tcf transactivation. In contrast, cell lines with APC promoter 1A hypermethylation did not show increased Wnt signalling, probably due to residual APC activity expressed from promoter 1B. Suppression of APC transcripts in melanoma cells by stable expression of short hairpin RNAs led to a Wnt signalling-independent increase in cell proliferation, but also reduced the invasive growth in collagen type I. Collectively, our data suggest that the tumour-suppressive function of APC in melanocytic cells is dose dependent. We propose that epigenetic silencing of promoter 1A may contribute to the development of malignant melanoma by reducing the expression of APC to a level that promotes cell proliferation without compromising the invasive capacity.