The Armadillo catenin p120ctn regulates cadherin adhesive strength at the plasma membrane and interacts with the novel BTB/POZ transcriptional repressor Kaiso in the nucleus. The dual localization of p120ctn at cell-cell junctions and in the nucleus suggests that its nucleocytoplasmic trafficking is tightly regulated. Here we report on the identification of a specific and highly basic nuclear localization signal (NLS) in p120ctn. The functionality of the NLS was validated by its ability to direct the nuclear localization of a heterologous β-galactosidase-GFP fusion protein. Mutating two key positively charged lysines to neutral alanines in the NLS of full-length p120ctn inhibited both p120ctn nuclear localization as well as the characteristic p120ctn-induced branching phenotype that correlates with increased cell migration. However, while these findings and others suggested that nuclear localization of p120ctn was crucial for the p120ctn-induced branching phenotype, we found that forced nuclear localization of both wild-type and NLS-mutated p120ctn did not induce branching. Recently, we also found that one role of p120ctn was to regulate Kaiso-mediated transcriptional repression. However, it remained unclear whether p120ctn sequestered Kaiso in the cytosol or directly inhibited Kaiso transcriptional activity in the nucleus. Using minimal promoter assays, we show here that the regulatory effect of p120ctn on Kaiso transcriptional activity requires the nuclear translocation of p120ctn. Therefore, an intact NLS in p120ctn is requisite for its first identified regulatory role of the transcriptional repressor Kaiso.