Plakoglobin (Pg) and beta-catenin are homologous proteins that function in cell-cell adhesion and signaling. The cadherin-associated form of these proteins mediates adhesion, whereas the cytosolic/nuclear form has a signaling role. Despite their interactions with common cellular partners, beta-catenin has a well-documented oncogenic potential while Pg has a less characterized tumor suppressor activity. We showed previously that Pg overexpression in Pg-deficient SCC9 cells (SCC9-Pg-WT) induced Bcl-2 expression and inhibited apoptosis. To assess the exact role of Pg in Bcl-2 expression, we generated and characterized SCC9 transfectants expressing Pg with a restricted cytoplasmic (Pg-NES) or nuclear (Pg-NLS) distribution. We show that Bcl-2 was expressed regardless of Pg localization, although its level was substantially lower in SCC9-Pg-NLS cells. Bcl-2 expression coincided with increased nuclear beta-catenin levels (Pg-NES) or a decrease in the level of total and nuclear beta-catenin associated with N-cadherin and alpha-catenin (Pg-WT and -NLS) cells. Bcl-2 expression also was induced in SCC9 cells overexpressing beta-catenin. In contrast, SCC9 cells expressing mutant Pg proteins, unable to interact with N-cadherin and alpha-catenin, had noticeably lower Bcl-2 levels. Our data suggest that Bcl-2 expression is induced by beta-catenin and modulated by Pg. We show that the inhibition of beta-catenin-dependent TCF transactivation had no effect on Bcl-2 levels, suggesting that induction of Bcl-2 expression by beta-catenin and its modulation by Pg may involve factors other than, or in addition, to, TCF. These results provide a possible mechanism for the tumor suppressor activity of Pg via its role as a regulator of the oncogenic potential beta-catenin.