T cell factor 4 (TCF4) interacts with beta-catenin in the WNT signaling pathway and transactivates downstream target genes involved in cancer progression. To identify proteins that regulate TCF4-mediated biological responses, we performed a yeast two-hybrid screen to search for a TCF4-binding protein(s) and found that MAD2B interacts with TCF4. We confirmed that MAD2B is a TCF4-binding protein by co-immunoprecipitation. Using the TOPFLASH reporter assay, we found that MAD2B blocks TCF4-mediated transactivation. The MAD2B binding regions of TCF4 were identified by TCF4 deletion mapping and electrophoretic mobility shift assay analysis. TCF4 and MAD2B interactions abolished the DNA binding ability of TCF4. Knockdown of MAD2B in SW480 colorectal cancer cells led to the conversion of epithelial cells to a mesenchymal fibroblastoid phenotype (epithelial-mesenchymal transdifferentiation). An E-cadherin promoter reporter analysis showed that MAD2B modulates TCF4-mediated E-cadherin expression. MAD2B knockdown blocked E-cadherin expression and significantly induced mesenchymal markers, such as N-cadherin and vimentin. Mesenchymal induction was accompanied by F-actin redistribution and the appearance of a fibroblastoid phenotype. MAD2B knockdown also increased both mRNA and protein levels of Slug, a known TCF4-induced E-cadherin transcriptional repressor. A chromatin immunoprecipitation assay showed that MAD2B silencing enhances the ability of TCF4 to bind the Slug promoter. Thus, MAD2B is a novel TCF4-interacting protein. This study provides the first evidence for the involvement of MAD2B in TCF4-mediated epithelial-mesenchymal transdifferentiation.