Wnt/beta-catenin signaling is required for crypt structure maintenance. We previously observed nuclear accumulation of Ser-552 phosphorylated beta-catenin (pbeta-Cat(Ser-552)) in intestinal epithelial cells (IEC) during colitis and colitis-associated cancer. Data here delineate a novel multiprotein cytosolic complex (MCC) involved in beta-catenin signaling in the intestine. The MCC contains p85alpha, the class IA subunit of PI3K, along with beta-catenin, 14-3-3zeta, Akt, and p110alpha. MCC levels in IEC increase in colitis and colitis-associated cancer patients. IEC-specific p85alpha-deficient (p85(DeltaIEC)) mice develop more severe dextran sodium sulfate colitis due to delayed ulcer healing and reduced epithelial beta-catenin activation. In colonic IEC, p85alpha deficiency did not alter PI3K signaling. In vitro shRNA depletion of individual complex members disrupts the MCC and reduces beta-catenin signaling. Despite worse colitis, p85(DeltaIEC) mice have reduced tumor burden after azoxymethane/dextran sodium sulfate treatment. Together the data indicate that the beta-catenin MCC is needed for mucosal repair and carcinogenesis. This novel MCC may be an attractive therapeutic target in preventing cancer in colitis patients.