Overexpression of cell surface glycoproteins of the CD44 family is an early event in the colorectal adenoma-carcinoma sequence. This suggests a link with disruption of APC tumor suppressor protein-mediated regulation of beta-catenin/Tcf-4 signaling, which is crucial in initiating tumorigenesis. To explore this hypothesis, we analyzed CD44 expression in the intestinal mucosa of mice and humans with genetic defects in either APC or Tcf-4, leading to constitutive activation or blockade of the beta-catenin/Tcf-4 pathway, respectively. We show that CD44 expression in the non-neoplastic intestinal mucosa of Apc mutant mice is confined to the crypt epithelium but that CD44 is strongly overexpressed in adenomas as well as in invasive carcinomas. This overexpression includes the standard part of the CD44 (CD44s) as well as variant exons (CD44v). Interestingly, deregulated CD44 expression is already present in aberrant crypt foci with dysplasia (ACFs), the earliest detectable lesions of colorectal neoplasia. Like ACFs of Apc-mutant mice, ACFs of familial adenomatous polyposis (FAP) patients also overexpress CD44. In sharp contrast, Tcf-4 mutant mice show a complete absence of CD44 in the epithelium of the small intestine. This loss of CD44 concurs with loss of stem cell characteristics, shared with adenoma cells. Our results indicate that CD44 expression is part of a genetic program controlled by the beta-catenin/Tcf-4 signaling pathway and suggest a role for CD44 in the generation and turnover of epithelial cells.