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Previously, we characterized human islet-derived precursor cells (hIPCs) as mesenchymal stem cells that migrate out from islets in vitro and can differentiate into functional islet-like structures following proliferative expansion. Here, we investigate the role of β-catenin signalling in derivation and proliferation of hIPCs.Localization of β-catenin was performed using confocal microscopy. Expression levels of β-catenin target genes were measured by quantitative real-time polymerase chain reaction. Loss-of-function studies were performed using specific short interfering RNAs.Immunostaining of islet outgrowths revealed translocation of β-catenin from plasma membranes in intact islets to the nucleus in cells migrating out. There were no nuclear β-catenin-positive cells in intact islets whereas between 35% and 70% of cells in established hIPC cultures exhibited nuclear β-catenin. Transcripts for β-catenin target genes were increased in hIPCs compared to those in islets. β-Catenin translocated to the cell membrane when hIPCs formed epithelial cell clusters. In proliferating hIPCs, there was a strong correlation between markers of proliferation and nuclear β-catenin. Treatment of hIPCs with the glycogen synthase kinase-3β inhibitor (2′Z,3′E)-6-Bromoindirubin-3′-oxime increased intracellular β-catenin but reduced nuclear β-catenin, and was associated with reduced cell proliferation. Finally, knockdown of β-catenin decreased β-catenin target gene expression and hIPC proliferation.These results support a functional role for β-catenin during proliferation of hIPCs and suggest that activated β-catenin signalling may also be important during hIPC derivation from islets.