Background: The APC tumour suppressor functions in several cellular processes including the regulation of beta-catenin in Wnt signalling and in cell adhesion and migration. Findings: In this study, we establish that in epithelial cells N-terminally phosphorylated beta-catenin specifically localises to several subcellular sites including cell-cell contacts and the ends of cell protrusions. N-terminally phosphorylated beta-catenin associates with E-cadherin at adherens junctions and with APC in cell protrusions. We isolated APC-rich protrusions from stimulated cells and detected beta-catenin, GSK3 beta and CK1 alpha, but not axin. The APC/phospho-beta-catenin complex in cell protrusions appears to be distinct from the APC/axin/beta-catenin destruction complex. GSK3b phosphorylates the APC-associated population of beta-catenin, but not the cell junction population. beta-catenin associated with APC is rapidly phosphorylated and dephosphorylated. HGF and wound-induced cell migration promote the localised accumulation of APC and phosphorylated beta-catenin at the leading edge of migrating cells. APC siRNA and analysis of colon cancer cell lines show that functional APC is required for localised phospho-beta-catenin accumulation in cell protrusions. Conclusions: We conclude that N-terminal phosphorylation of beta-catenin does not necessarily lead to its degradation but instead marks distinct functions, such as cell migration and/or adhesion processes. Localised regulation of APC-phospho-beta-catenin complexes may contribute to the tumour suppressor activity of APC.