beta-Catenin is a bifunctional protein participating in both cell adhesion and canonical Wnt signaling. In cell adhesion, it bridges the transmembrane cadherin and the actin-binding protein alpha-catenin and is essential for adherens junction formation, whereas in canonical Wnt signaling, it shuttles between the cytosol and nucleus and functions as an essential transcriptional activator. Schmidtea mediterranea beta-catenin-1 was identified as a determinant of antero-posterior polarity during body regeneration by mediating Wnt signaling. Here we show that S. mediterranea beta-catenin-2 is specifically expressed in epithelial cells in the gut and pharynx, where it has a putative role in mediating cell adhesion. We show evidence that planarian beta-catenin-1 and -2 have distinct biochemical properties. beta-Catenin-1 can interact with the components of the canonical Wnt signaling pathway but not with alpha-catenin, whereas beta-catenin-2 interacts with cell adhesion molecules, including E-cadherin and alpha-catenin, but not with Wnt signaling components. Consistent with their specific function, beta-catenin-1 is a potent transcriptional activator, whereas beta-catenin-2 has no transcriptional activity. Protein sequence alignment also indicates that the planarian beta-catenin-1 and -2 retain distinct critical residues and motifs, which are in agreement with the differences in their biochemical properties. At last, phylogenetic analysis reveals a probable Platyhelminthes- specific structural and functional segregation from which the monofunctional beta-catenins evolved. Our results thus identify the first two monofunctional beta-catenins in metazoans.