β-catenin signaling has been shown to play a role in T cell development. However, the function of β-catenin in peripheral T cell regulation is not understood. Activation of T cells via TCR/CD28 ligation resulted in low-level stabilization of β-catenin which was augmented with proteasome inhibition. To determine the consequences of increased β-catenin expression, CAR Tg T cells were transduced with an adenoviral vector encoding a non-degradable β-catenin, which inhibited proliferation and cytokine secretion. Experiments were performed to determine the mechanism of this inhibition. Decreased IL-2 production was confirmed at the mRNA level, and surface expression of TCR and CD28 were not altered. IL-2 production was rescued with PMA+Ionomycin, arguing for a defect in proximal TCR signaling. TCR-induced phosphorylation of Lck, LAT, Akt, and ERK were intact in β-catenin-expressing T cells. However, phosphorylation of PLC-γ1 was significantly reduced, as was Ca++ flux. Conversely, deletion of the β-catenin gene from primary T cells using CAR Tg conditional knockout mice and a Cre-adenovirus caused augmented cytokine production and proliferation. Our results suggest that β-catenin negatively regulates TCR-mediated activation or peripheral T cells via a novel mechanism.