Gene expression programs can become activated in response to extracellular signals. One evolutionarily conserved example is binding of Wnt glycoproteins to their receptor, which triggers a signal transduction cascade that stabilizes cytoplasmic β-catenin protein, allowing it to translocate into the nucleus. There, β-catenin binds to TCF/Lef family transcription factors and promotes the expression of target genes. Mutations in either the β-catenin gene itself or its partner protein APC are responsible for the oncogenic activation of this pathway in colorectal tumors. Here we report the splicing factor SRp20 as a novel target gene of β-catenin/TCF4 signaling. Transfection of activated β-catenin mutants into colorectal cells increased expression of endogenous SRp20 transcript and protein and also stimulated a luciferase reporter construct containing the SRp20 gene promoter. In contrast, inhibition of endogenous β-catenin signaling by a dominant-negative TCF4 construct down-regulated both luciferase reporter and SRp20 expression. We further demonstrate that the β-catenin/TCF4-mediated increase in SRp20 protein levels is sufficient to modulate alternative splicing decisions in the cells. In particular, we observed a change in the alternative splicing pattern in a control minigene reporter as well as in the endogenous SRp20-regulated CD44 cell adhesion protein. These results demonstrate that the β-catenin/TCF4 pathway not only stimulates gene transcription, but also promotes the generation of transcript variants through alternative splicing. Our data support the recent notion that transcription and alternative splicing represent two different layers of gene expression and that signaling pathways act upon a coordinated network of transcripts in each layer.