Misregulation of the Wnt/beta-catenin signaling pathway is a hallmark of several forms of cancer. Components of the Wnt/beta-catenin pathway are expressed in ovarian granulosa cells; nevertheless, its potential involvement in granulosa cell tumorigenesis has not been examined. To this end, human (n = 6) and equine (n = 18) granulosa cell tumors (GCT) were analyzed for beta-catenin expression by immunohistochemistry. Unlike granulosa cells of normal ovaries, most (15 of 24) GCT samples showed nuclear localization of beta-catenin, suggesting that activation of the Wnt/beta-catenin pathway plays a role in the etiology of GCT. To confirm this hypothesis, Catnb(flox(ex3)/+); Amhr2(cre/+) mice that express a dominant stable beta-catenin mutant in their granulosa cells were generated. These mice developed follicle-like structures containing disorganized, pleiomorphic granulosa by 6 weeks of age. Even in older mice, these follicle-like lesions grew no larger than the size of antral follicles and contained very few proliferating cells. Similar to corpora lutea, the lesions were highly vascularized, although they did not express the luteinization marker Cyp11a1. Catnb(flox(ex3)/+); Amhr2(cre/+) females were also found to be severely subfertile, and fewer corpora lutea were found to form in response to exogenous gonadotropin compared with control mice. In older mice, the ovarian lesions often evolved into GCT, indicating that they represent a pretumoral intermediate stage. The GCT in Catnb(flox(ex3)/+); Amhr2(cre/+) mice featured many histopathologic similarities to the human disease, and prevalence of tumor development attained 57% at 7.5 months of age. Together, these studies show a causal link between misregulated Wnt/beta-catenin signaling and GCT development and provide a novel model system for the study of GCT biology.