β-Catenin is a multifunctional protein, stabilization of which is a critical step in its functional activity. Stabilization can be conferred through several means, including mutations in β-catenin, common in many carcinomas. In this article, we explore the effect of viral infection on the β-catenin signaling pathway in B lymphocytes, including cell lines derived from lymphomas. Infection by the human tumor virus Epstein–Barr virus (EBV) generates several types of latency with different spectra of latent gene expression that are associated with different malignancies. In type III latency, exemplified by EBV lymphoproliferative diseases, the full range of these viral proteins is expressed, whereas in type I latency, only the EBNA1 protein is expressed and functional. We show that β-catenin is rapidly degraded in type I B lymphocytic lines but it is stabilized in type III B cell lines, and that β-catenin/T cell factor transcriptional activity is significantly higher in type III cells. Also we show the association of free cytoplasmic β-catenin with deubiquitinating enzymes, which may play a role in β-catenin stabilization. Activation of the β-catenin/T cell factor pathway by EBV may contribute to the lymphoproliferation characteristic of type III latency.