The cessation of proliferation and the induction of differentiation are highly coordinated processes that occur continuously in the intestinal crypts. The homeodomain transcription factors Cdx1 and Cdx2 regulate intestine-specific gene expression and enterocyte differentiation. Their roles in regulating proliferation are recognized but remain poorly understood. Previously, we demonstrated that Cdx1 expression diminished the proliferation of human colon cancer cells in part by reducing cyclin D1 gene expression. In order to elucidate further the molecular mechanisms underlying this phenomenon, we first hypothesized that Cdx1 or Cdx2 expression reduces colon cancer cell proliferation by inhibiting beta-catenin/T-cell factor (TCF) transcriptional activity. We report that Cdx1 or Cdx2 expression does inhibit beta-catenin/TCF transcriptional activity in colon cancer cells. This inhibitory effect is dose-dependent and is observed in different colon cancer cell lines, and the degree of inhibition correlates with the ability of Cdx1 to reduce cell proliferation. Cdx1 expression does not alter beta-catenin protein levels or intracellular distribution nor does it induce an inhibitory TCF isoform. We also find that Cdx1 expression is lost in Min mouse polyps with increased nuclear localization of beta-catenin, suggesting that Cdx1 does not support beta-catenin-mediated transformation. Finally, we show that colon cancer cells effectively reduce Cdx2-mediated inhibition of Wnt/beta-catenin/TCF transcriptional activity when compared with other model systems. This suggests that colon cancer and possibly crypt epithelial cells can modulate the effects of Cdx2 on beta-catenin signaling and proliferation. We conclude that Cdx1 and Cdx2 inhibit colon cancer cell proliferation by blocking beta-catenin/TCF transcriptional activity.