Accumulation of cytoplasmic inclusion bodies in many neurodegenerative diseases, including Alzheimer's disease (AD), might result from dysfunction of the ubiquitin-proteasome system. This system degrades many cellular proteins, including beta-catenin, a member of the Wnt signaling pathway, and a presenilin-1-interacting protein. Phosphorylation of beta-catenin marks it for ubiquitination and rapid proteasomal degradation. We found phospho-beta-catenin accumulated as detergent-insoluble, punctate, cytoplasmic inclusions in hippocampal pyramidal neurons more abundantly in AD than in aged controls. In AD, beta-catenin was ubiquitin conjugated, thus suggesting impaired proteasome-dependent degradation. Phospho-beta-catenin was partially sequestered within granulovacuolar degeneration bodies but not in lysosomes, indicating sequestration within autophagosomes. Exposure of neuronal cultures to proteasome inhibitors induced formation of detergent-insoluble, phospho-beta-catenin-positive cytoplasmic inclusions that coalesced into aggresomes and colocalized with gamma-tubulin and vimentin. These aggregates were associated with apoptotic cell death and with activation of caspase-3, c-Jun-N-terminal kinases, and c-Jun. These findings suggest that phospho-beta-catenin accumulation in AD might result from impaired proteasome function.