As the molecular mechanism of β-catenin deregulation is not well understood, and stabilized β-catenin is known to translocate into the nucleus and activate genes for proliferation, a novel regulatory factor, hematological and neurological expressed 1 (HN1), for Akt-GSK3β-β-catenin axis is reported here. In our studies, HN1 gene structure was characterized. HN1 expression was found to be epidermal growth factor-responsive in PC-3 cells, and protein expression was also upregulated in PC-3 and LNCaP but not in DU145 cells. Additionally, HN1 was found to be downregulated by the specific AKT inhibitor wortmannin but not with PI3K or MAPK inhibitors, LY294002 and PD98059, respectively, in PC-3 and MCF-7 cells. Further, siRNA-mediated knockdown of HN1 resulted in considerable increase in Akt((S473)) and GSK3β((S9),(Y216)) phosphorylations; moreover, subsequent accumulation of β-catenin, increase in c-myc expression, and nuclear accumulation of cyclin D1 were observed in PC-3 cells. Knockdown of HN1 also resulted in prolongation of G(1) phase in cell cycle, increasing tetraploidy, presumably because of cells escaping from abnormal mitosis in PC-3 cells. Consistently, overexpression of HN1 reversed the cell-cycle-specific observations, resulted in accumulation of cells in G(2)/M, and reduced the proliferation rate, which were investigated using flow cytometry and methylthiazol tetrazolium assays. As activating mutations of β-catenin have been demonstrated in late-stage tumors, and β-catenin stabilization was correlated with poor prognosis in previous reports, epidermal growth factor-upregulated HN1 expression might have a role in deregulating the AKT-GSK3β((S9))-mediated signaling as a novel compensating mechanism.