Developmentally, the pancreas and liver are closely related and pathological conditions - including elevated glucocorticoid levels - result in the appearance of hepatocytes in the pancreas. The role of the WNT signalling pathway in this process has been examined in the model transdifferentiating pancreatic acinar AR42J-B-13 (B-13) cell. Glucocorticoid treatment resulted in a transient loss of constitutive WNT3a expression, phosphorylation and depletion of beta-catenin, loss of beta-catenin nuclear localisation, and significant reductions in T-cell factor/lymphoid enhancer factor (Tcf/Lef) transcriptional activity before overt changes in phenotype into hepatocyte-like (B-13/H) cells. A return to higher Tcf/Lef transcriptional activity correlated with the re-expression of WNT3a in B-13/H cells. beta-catenin knock down alone substituted for and enhanced glucocorticoid-dependent transdifferentiation. Overexpression of a mutant beta-catenin (pt-Xbeta-cat) protein that blocked glucocorticoid-dependent suppression of Tcf/Lef activity resulted in inhibition of transdifferentiation. A small-molecule activator of Tcf/Lef transcription factors blocked glucocorticoid-dependent effects, as observed with pt-Xbeta-cat expression. Quercetin - a Tcf/Lef inhibitor - did not promote transdifferentiation into B-13/H cells, but did potentiate glucocorticoid-mediated transdifferentiation. These data demonstrate that the transdifferentiation of B-13 cells into hepatocyte-like cells in response to glucocorticoid was dependent on the repression of constitutively active WNT signalling.