Dysregulation of β-catenin levels and localization and constitutive activation of β-catenin/TCF (T cell factor)-regulated gene expression occur in many cancers, including the majority of colorectal carcinomas and a subset of ovarian endometrioid adenocarcinomas. Based on the results of microarray-based gene expression profiling we found the insulin receptor substrate 1 (IRS1) gene as one of the most highly up-regulated genes upon ectopic expression of a mutant, constitutively active form of β-catenin in the rat kidney epithelial cell line RK3E. We demonstrate expression of IRS1 can be directly activated by β-catenin, likely in part via β-catenin/TCF binding to TCF consensus binding elements located in the first intron and downstream of the IRS1 transcriptional start site. Consistent with the proposal that β-catenin is an important regulator of IRS1 expression in vivo, we observed that IRS1 is highly expressed in many cancers with constitutive stabilization of β-catenin, such as colorectal carcinomas and ovarian endometrioid adenocarcinomas. Using a short hairpin RNA approach to abrogate IRS1 expression and function, we found that IRS1 function is required for efficient de novo neoplastic transformation by β-catenin in RK3E cells. Our findings add to the growing body of data implicating IRS1 as a critical signaling component in cancer development and progression.