This study demonstrates that in malignant melanoma, elevated levels of nuclear beta-catenin in both primary tumors and metastases correlate with reduced expression of a marker of proliferation and with improved survival, in contrast to colorectal cancer. The reduction in proliferation observed in vivo is recapitulated in B16 murine melanoma cells and in human melanoma cell lines cultured in vitro with either WNT3A or small-molecule activators of beta-catenin signaling. Consistent with these results, B16 melanoma cells expressing WNT3A also exhibit decreased tumor size and decreased metastasis when implanted into mice. Genome-wide transcriptional profiling reveals that WNT3A up-regulates genes implicated in melanocyte differentiation, several of which are down-regulated with melanoma progression. These findings suggest that WNT3A can mediate transcriptional changes in melanoma cells in a manner reminiscent of the known role of Wnt/beta-catenin signaling in normal melanocyte development, thereby altering melanoma cell fate to one that may be less proliferative and potentially less aggressive. Our results may explain the observed loss of nuclear beta-catenin with melanoma progression in human tumors, which could reflect a dysregulation of cellular differentiation through a loss of homeostatic Wnt/beta-catenin signaling.