Genetic analysis of beta-catenin-induced oncogenic transformation in chicken embryo fibroblasts (CEF) revealed the following prerequisites for oncogenicity: (1) removal of the N terminal phosphorylation sites targeted by glycogen synthase kinase 3beta (GSK3beta), (2) retention of the N terminal transactivation domain, and (3) retention of the armadillo repeats. The C terminal transactivation domain played an ancillary role in the transformation of CEF. There was a rough correlation between the transforming activity of various beta-catenin constructs and their transactivation of the TOPFLASH reporter. Expression levels of the candidate target genes of beta-catenin-LEF, cyclin D1 and myc were not correlated with each other or with the transforming activity of beta-catenin constructs. A new target gene, coding for inositol hexakisphosphate kinase 2 (IP6K2) was identified. Its expression showed concordance with the transforming activity of beta-catenin constructs.