The transcription factor peroxisome proliferator-activated receptor gamma (PPARgamma) belongs to the family of nuclear hormone receptors and consists of two isotypes, PPARgamma1 and PPARgamma2. Our earlier studies have shown that troglitazone (TZD)-mediated activation of PPARgamma2 in hepatocytes inhibits growth and attenuates cyclin D1 transcription via modulating CREB levels. Because this process of growth inhibition was also associated with an inhibition of beta-catenin expression at a post-translational level, our aim was to elucidate the mechanism involved. beta-Catenin is a multifunctional protein, which can regulate cell-cell adhesion by interacting with E-cadherin and other cellular processes via regulating target gene transcription in association with TCF/LEF transcription factors. Two adenomatous polyposis coli (APC)-dependent proteasomal degradation pathways, one involving glycogen synthase kinase 3beta (GSK3beta) and the other involving p53-Siah-1, degrade excess beta-catenin in normal cells. Our immunofluorescence and Western blot studies indicated a TZD-dependent decrease in cytoplasmic and membrane-bound beta-catenin, indicating no increase in its membrane translocation. This was associated with a reduction in E-cadherin expression. PPARgamma2 activation inhibited GSK3beta kinase activity, and pharmacological inhibition of GSK3beta activity was unable to restore beta-catenin expression following PPARgamma2 activation. Additionally, this beta-catenin degradation pathway was operative in cells, with inactivating mutations of both APC and p53. Inhibition of the proteasomal pathway inhibited PPARgamma2-mediated degradation of beta-catenin, and incubation with TZD increased ubiquitination of beta-catenin. We conclude that PPARgamma2-mediated suppression of beta-catenin levels involves a novel APC/GSK3beta/p53-independent ubiquitination-mediated proteasomal degradation pathway.