ICAT (Inhibitor of β-CAtenin and TCF) is a small acidic protein that negatively regulates β-catenin co-transcriptional activity by competing with TCF/LEF factors in their binding to β-catenin superhelical core. In melanoma cells, ICAT competes with LEF1 to negatively regulate the M-MITF and NEDD9 target genes. The structure of ICAT consists of two domains: the 3-helix bundle N-terminal domain binds to β-catenin Armadillo (Arm) repeats 10-12 and the C-terminal tail binds to Arm repeats 5-9. To elucidate the structural mechanisms governing ICAT/β-catenin interactions in melanoma cells, three ICAT residues Y15, K19 and V22 in the N-terminal domain, contacting hydrophobic β-catenin residue F660, were mutated and interaction was assessed by immunoprecipitation. Despite the moderate hydrophobicity of the contact, its removal completely abolished the interaction. In the ICAT C-terminal tail consensus sequence, neutralization of the electrostatic interactions between residues D66, E75 and β-catenin residues K435, K312, coupled to deletion of the hydrophobic contact between F71 and β-catenin R386, markedly reduced, but failed to abolish the ICAT-mediated negative regulation of M-MITF and NEDD9 promoters. We conclude that in melanoma cells, anchoring of ICAT N-terminal domain to β-catenin through the hook made by residue F660, trapped in the pincers formed by ICAT residues Y15 and V22, is crucial for stabilizing the ICAT/β-cate-nin complex. This is a prerequisite for binding of the consensus peptide to Arm repeats 5-9 and competition with LEF1. Differences between ICAT and LEF1 in their affinity for β-catenin may rely on the absence in ICAT of hydrophilic residues between D66 and F71.