Wnt signaling has an essential role in embryonic development as well as stem/progenitor cell renewal, and its aberrant activation is implicated in many diseases, including several cancers. β-Catenin is a critical component of Wnt-mediated transcriptional activation. Here we show that ARF6 activation during canonical Wnt signaling promotes the intracellular accumulation of β-catenin via a mechanism that involves the endocytosis of growth factor receptors and robust activation of extracellular signal-regulated kinase (ERK). ERK promotes casein kinase 2-mediated phosphorylation of α-catenin, leading to destabilization of the adherens junctions and a subsequent increase in cytoplasmic pools of active β-catenin and E-cadherin. ERK also phosphorylates LRP6 to amplify the Wnt transduction pathway. The aforementioned Wnt-ERK signaling pathway initiates lumen filling of epithelial cysts by promoting cell proliferation in three-dimensional cell cultures. This study elucidates a mechanism responsible for the switch in β-catenin functions in cell adhesion at the adherens junctions and Wnt-induced nuclear signaling.