Dysregulation of beta-catenin signaling has been implicated in the malignant transformation of cells. However, the role of beta-catenin in the human T-cell leukemia virus type 1 (HTLV-1)-induced transformation of T cells is unknown. Here we found that beta-catenin protein was overexpressed in the nucleus and that beta-catenin-dependent transcription was significantly enhanced in Tax-positive HTLV-1-infected T-cell lines compared to that in Tax-negative HTLV-1-infected T-cell lines. Transfection with beta-catenin-specific small interfering RNA inhibited the growth of the Tax-positive HTLV-1-infected T-cell line HUT-102. Transient transfection of Tax appeared to enhance beta-catenin-dependent transcription by stabilizing the beta-catenin protein via activation of the cyclic AMP (cAMP) response element-binding protein. HTLV-1-infected T-cell lines overexpressing beta-catenin also showed increased Akt activity via Tax activation of the cAMP response element-binding protein, resulting in the phosphorylation and inactivation of glycogen synthase kinase 3beta, which phosphorylates beta-catenin for ubiquitination. The phosphatidylinositol 3-kinase inhibitor LY294002 reduced beta-catenin expression in Tax-positive T-cell lines, and inactivation of glycogen synthase kinase 3beta by lithium chloride restored beta-catenin expression in Tax-negative T-cell lines. Finally, we showed that dominant-negative Akt inhibited Tax-induced beta-catenin-dependent transcription. These results indicate that Tax activates beta-catenin through the Akt signaling pathway. Our findings suggest that activation of beta-catenin by Tax may be important in the transformation of T cells by HTLV-1 infection.