B-catenin is the central effector molecule of the canonical Wnt signalling pathway, which controls self-renewal of haematopoietic stem cells. Deregulation of this pathway occurs in various malignancies including myeloid leukaemias. The present study examined the functional outcome of stable β-catenin down-regulation through lentivirus-mediated expression of short hairpin RNA (shRNA). Reduction of the β-catenin levels in acute myeloid leukaemia (AML) cell lines and patient samples decelerated their in vitro proliferation ability without affecting cell viability. Transplantation of leukaemic cells with control or reduced levels of β-catenin in non-obese diabetic severe combined immunodeficient animals indicated that, while the immediate homing of the cells was unaffected, the bone marrow engraftment was directly dependent on β-catenin levels. Subsequent examination of bone sections revealed that β-catenin was implicated in the localization of AML to the endosteum. Examination of adhesion molecule expression before and after transplantation, revealed down-regulation of CD44 expression, accompanied by reduced in vitro adhesion. Gene expression analysis disclosed the presence of an autocrine compensatory mechanism, which responds to the reduced β-catenin levels by altering the expression of positive and negative pathway regulators. In conclusion, our study showed that β-catenin comprises an integral part of AML cell proliferation, cell cycle progression, and adhesion, and influences disease establishment in vivo.