Beta-catenin signaling has been shown to play a fundamental role in embryonic development and tumorigenesis. In this study, we investigated the role of beta-catenin (Ctnnb1) in corneal homeostasis and tumorigenesis. Conditional expression of a murine Ctnnb1 gain-of-function mutation alone caused corneal neoplasia and neovascularization, resembling human ocular surface squamous neoplasia (OSSN). These corneas displayed an upregulation of cell proliferative markers (PCNA and p63), while presenting downregulation of both the Pax-6 transcription factor and the corneal differentiation marker cytokeratin 12. In addition, the expression of limbal-type keratin 15 ectopically extended to cornea, but the pattern of conjunctival keratin 4 and epidermal keratin 10 were unchanged. Moreover, epithelial E-cadherin and laminins decreased concomitantly with elevated levels of MMP-7. We also noticed a dramatic upregulation of pro-angiogenic factors (Vegf-A, Vegfr1) and angiopoietins in these corneas. Interestingly, all human OSSN specimens examined revealed nuclear beta-catenin immunoreactivity. Taken together, these results argue that beta-catenin activation is a crucial step during OSSN pathogenesis. Thus, inhibition of beta-catenin might be beneficial for treating this disease.