Wnt signaling follows canonical and non-canonical pathways to regulate a variety of processes during cellular homeostasis and development. The large T-antigen (T-Ag) of the human neurotropic JC virus, has been shown to modulate the Wnt-signaling pathway via interaction with b-catenin, one of the most important components of the canonical Wnt pathway. Here, we have identified an alternative non-canonical pathway that allows T-Ag to recruit Rac1 for stabilizing b-catenin by inhibiting its ubiquitin-dependent proteasomal degradation. We demonstrate that inhibition of Rac1 by its dominant negative mutant, RacN17, abrogates T-Ag-mediated stabilization of b-catenin yet exhibits no impact on the transcriptional activity of b-catenin. Results from immunocytochemistry revealed that together with T-Ag, a pool of b-catenin appears at the cell surface, particularly at the membrane ruffles where active Rac1 is positioned. Interestingly, cooperativity between T-Ag and b-catenin leads to activation of Rac1, which in turn, stimulates its association with b-catenin. These observations unravel the interplay between b-catenin and Rac1 that is initiated by T-Ag and results in stabilization of b-catenin and its presence in cell membrane ruffles.