T cell factor-1 (TCF1) critically regulates T cell development. However, signals that control TCF1 function in developing and mature T cells remain unknown. TCF1 along with beta-catenin activates gene transcription and in cooperation with Groucho family of proteins mediates gene repression. It has been established that the beta-catenin-dependent gene expression is often downstream of the canonical Wnt signaling pathway. We have genetically manipulated the beta-catenin gene and generated mutant mice that have shown an essential role for beta-catenin and TCF1 during pre-T cell receptor (TCR) and TCR-dependent stages of T cell development. We have also demonstrated a function for TCF1 and beta-catenin downstream of TCR signaling in the differentiation of mature CD4 T cells into T helper lineages.