β-Catenin plays a dual role in cells: one at cell–cell junctions and one regulating gene transcription together with TCF (T-cell Factor) in the nucleus. Recently, a role for β-catenin in osteoblast differentiation and gene expression has begun to be elucidated. Herein we investigated the effects of fluid shear stress (FSS) on β-catenin signaling. FSS is a well-characterized anabolic stimulus for osteoblasts; however, the molecular mechanisms for the effects of this stimulation remain largely unknown. We found that 1 hour of laminar FSS (10 dynes/cm²) induced translocation of β-catenin to the nucleus and activated a TCF-reporter gene. Analysis of upstream signals that may regulate β-catenin signaling activity revealed two potential mechanisms for increased β-catenin signaling. First, FSS induced a transient, but significant, increase in the phosphorylation of both glycogen synthase kinase 3β (GSK-3β) and Akt. Second, FSS reduced the levels of β-catenin associated with N-cadherin, suggesting that less sequestration of β-catenin by cadherins occurs in osteoblasts subjected to FSS. Functional analysts of potential genes regulated by β-catenin signaling in osteoblasts revealed two novel observations. First, endogenous, nuclear β-catenin purified from osteoblasts formed a complex with a TCF -binding element in the cyclooxygenase-2 promoter, and, second, overexpression of either a constitutively active β-catenin molecule or inhibition of GSK-3β activity increased basal cyclooxygenase-2 levels. Together, these data demonstrate for the first time that FSS modulates the activity of both GSK-3β and β-catenin and that these signaling molecules regulate cyclooxygenase-2 expression in osteoblasts.