β-catenin is a master regulator in the cellular biology of development and neoplasia. Its dysregulation is implicated as a driver of colorectal carcinogenesis and the epithelial-mesenchymal transition in other cancers. Nuclear β-catenin staining is a poor prognostic sign in synovial sarcoma, the most common soft-tissue sarcoma in adolescents and young adults. We show through genetic experiments in a mouse model that expression of a stabilized form of β-catenin greatly enhances synovial sarcomagenesis. Stabilization of β-catenin enables a stem-cell phenotype in synovial sarcoma cells, specifically blocking epithelial differentiation and driving invasion. β-catenin achieves its reprogramming in part by upregulating transcription of TCF/LEF target genes. Even though synovial sarcoma is primarily a mesenchymal neoplasm, its progression towards a more aggressive and invasive phenotype parallels the epithelial-mesenchymal transition observed in epithelial cancers, where β-catenin's transcriptional contribution includes blocking epithelial differentiation.