β-catenin has been implicated in thymocyte development because of its function as a coactivator of Tcf/LEF-family transcription factors. Previously, we discovered a novel pathway for p53-induced β-catenin degradation through a ubiquitin E3 ligase complex involving Siah1, SIP (CacyBP), Skp1, and Ebi. To gain insights into the physiological relevance of this new degradation pathway in vivo, we generated mutant mice lacking SIP. We demonstrate here that SIP -/- thymocytes have an impaired pre-TCR checkpoint with failure of TCRβ gene rearrangement and increased apoptosis, resulting in reduced cellularity of the thymus. Moreover, the degradation of β-catenin in response to DNA damage is significantly impaired in SIP-/- cells. SIP-/- embryonic fibroblasts show a growth-rate increase resulting from defects in G1 arrest. Thus, the β-catenin degradation pathway mediated by SIP defines an essential checkpoint for thymocyte development and cell-cycle progression.