The Fra3B locus on chromosome 3p14.2 targeting the fragile histidine triad (Fhit) gene represents one of the most common fragile sites of the human genome and is associated with early preneoplastic and malignant disorders in multiple human tumors. Fhit was classified as a tumor suppressor; however, the molecular mechanisms of its function are not well established. Here, we report that Fhit associates with the lymphoid enhancer-binding factor 1/T cell factor/beta-catenin complex by directly binding to beta-catenin, a major player in the canonical Wnt pathway that is deregulated in numerous forms of human cancer. In binding to the beta-catenin C-terminal domain, Fhit represses transcription of target genes such as cyclin D1, axin2, MMP-14, and survivin. Knockdown of Fhit reversed this effect, whereas this reversal was not detectable when beta-catenin was knocked down simultaneously. The Fhit enzymatic activity as a diadenosine-polyphosphate hydrolase is not required for the down-regulation of beta-catenin-mediated transcription as examined with an enzymatic inactive Fhit-H96N protein. ChIPs revealed recruitment of Fhit/beta-catenin complexes to target gene promoters. In soft agar assays Fhit and beta-catenin are involved in regulation of anchorage-independent growth. These observations assign to the tumor suppressor Fhit an unexpected role in the regulation of beta-catenin-mediated gene transcription.