Aberrant Wnt/beta-catenin signaling following loss of the tumor suppressor adenomatous polyposis coli (APC) is thought to initiate colon adenoma formation. Considerable evidence for this model has come from mouse models of Apc truncation where nuclear beta-catenin is detectable soon after loss of Apc. However, examination of tumors from familial adenomatous polyposis coli (FAP) patients has failed to confirm the presence of nuclear beta-catenin in early lesions following APC loss despite robust staining in later lesions. This observation presents the possibility that colon adenomas arise through a beta-catenin-independent function of APC. Additionally, there is a well established role for inflammation and specifically COX-2 and prostaglandin E2 in the progression of colorectal cancer. Here we review the current literature regarding the functions of APC in regulating WNT/beta-catenin signaling as well as its control of intestinal cell fate and differentiation. Further, we provide a brief commentary on our current understanding of the role that inflammation plays in colorectal tumorigenesis and how it fits in with APC dysfunction. Though there are currently contrasting models to explain colon tumorigenesis, our goal is to begin to reconcile data from multiple different model systems and provide a functional view into the initiation and progression of colon cancer.