The Armadillo catenin p120(ctn) regulates cadherin adhesive strength at the plasma membrane and interacts with the novel BTB/POZ transcriptional repressor Kaiso in the nucleus. The dual localization of p120(ctn) at cell-cell junctions and in the nucleus suggests that its nucleocytoplasmic trafficking is tightly regulated. Here we report on the identification of a specific and highly basic nuclear localization signal (NLS) in p120(ctn). The functionality of the NLS was validated by its ability to direct the nuclear localization of a heterologous beta-galactosidase-GFP fusion protein. Mutating two key positively charged lysines to neutral alanines in the NLS of full-length p120(ctn) inhibited both p120(ctn) nuclear localization as well as the characteristic p120(ctn)-induced branching phenotype that correlates with increased cell migration. However, while these findings and others suggested that nuclear localization of p120(ctn) was crucial for the p120(ctn)-induced branching phenotype, we found that forced nuclear localization of both wild-type and NLS-mutated p120(ctn) did not induce branching. Recently, we also found that one role of p120(ctn) was to regulate Kaiso-mediated transcriptional repression. However, it remained unclear whether p120(ctn) sequestered Kaiso in the cytosol or directly inhibited Kaiso transcriptional activity in the nucleus. Using minimal promoter assays, we show here that the regulatory effect of p120(ctn) on Kaiso transcriptional activity requires the nuclear translocation of p120(ctn). Therefore, an intact NLS in p120(ctn) is requisite for its first identified regulatory role of the transcriptional repressor Kaiso.