Drosophila Armadillo and its mammalian homologue β-catenin are scaffolding proteins involved in the assembly of multiprotein complexes with diverse biological roles. They mediate adherens junction assembly, thus determining tissue architecture, and also transduce Wnt/Wingless intercellular signals, which regulate embryonic cell fates and, if inappropriately activated, contribute to tumorigenesis. To learn more about Armadillo/β-catenin's scaffolding function, we examined in detail its interaction with one of its protein targets, cadherin. We utilized two assay systems: the yeast two-hybrid system to study cadherin binding in the absence of Armadillo/β-catenin's other protein partners, and mammalian cells where interactions were assessed in their presence. We found that segments of the cadherin cytoplasmic tail as small as 23 amino acids bind Armadillo or β-catenin in yeast, whereas a slightly longer region is required for binding in mammalian cells. We used mutagenesis to identify critical amino acids required for cadherin interaction with Armadillo/β-catenin. Expression of such short cadherin sequences in mammalian cells did not affect adherens junctions but effectively inhibited β-catenin-mediated signaling. This suggests that the interaction between β-catenin and T cell factor family transcription factors is a sensitive target for disruption, making the use of analogues of these cadherin derivatives a potentially useful means to suppress tumor progression.