The human hepatocellular carcinoma (HCC) is one of the most common malignant tumors worldwide. The mechanisms of liver cell oncogenic transformation are still unknown. The beta-catenin mutations are identified in up to 30% of HCC and 80% of hepatoblastoma, suggesting a potential role of beta-catenin in the pathogenesis of liver cancers. To define the biological role of the stabilized beta-catenin in liver cell growth and transformation, we examined the effect of mutant beta-catenin on an immortalized murine hepatocyte cell line, AML12. A cell line that stably expresses mutant beta-catenin was established. The cell proliferation, apoptosis, and cell transformation of this cell line were characterized. Our data indicate that the stabilized beta-catenin enhances hepatocyte proliferation, suppresses TNFalpha/Act D-induced cell apoptosis, and causes weak anchorage-independent cell growth. The stabilized beta-catenin-containing cells did not develop tumor in immune-deficient mice. The target genes, c-myc and cyclin D1, were activated by beta-catenin in the hepatocytes. Our study suggests that mutant beta-catenin can promote cell proliferation and cell survival ability, but the stabilized beta-catenin alone is insufficient for completely oncogenic transformation.