The mechanisms underlying downregulation of the cadherin/catenin complexes and beta-catenin signaling during tumor progression are not fully understood. We have analyzed the effect of oncogenic H-Ras on E-cadherin/catenin complex formation/stabilization and beta-catenin distribution in epidermal keratinocytes. Microinjection or stable expression of V12Ras into keratinocytes promotes the loss of E-cadherin and alpha-catenin and relocalization of beta-catenin to the cytoplasm and nucleus. Moreover, these effects are dependent on PI3K (phosphoinositide 3-OH kinase) activity. Interestingly, a strong association of p85alpha and p110alpha subunits of PI3K with beta-catenin is induced in V12Ras-expressing keratinocytes, and in vitro binding assays show a direct interaction between beta-catenin and p85alpha. Overexpression of either V12Ras or constitutively active p110alpha induces metabolic stabilization of beta-catenin and promotes its accumulation in cytoplasmic and nuclear pools. In addition, the interaction of beta-catenin with the adenomatous polyposis coli protein is blocked in V12Ras and p110alpha transformants though no changes in glycogen synthase kinase 3 beta activity could be detected. Nevertheless, in V12Ras transformants the in vivo phosphorylation of beta-catenin in Ser residues is strongly decreased. These results indicate that H-Ras activation induces the relocalization and cytoplasmic stabilization of beta-catenin by a mechanism involving its interaction with PI3K.