beta-Arrestins were initially discovered as negative regulators of G protein-coupled receptor signaling. Although beta-arrestins have more recently been implicated as scaffold proteins that interact with various mitogenic and developmental signals, the genetic role of beta-arrestins in driving oncogenesis is not known. Here we have investigated the role of beta-arrestin in hematologic malignancies and have found that although both beta-arrestin1 and -2 are expressed in the hematopoietic system, loss of beta-arrestin2 preferentially leads to a severe impairment in the establishment and propagation of the chronic and blast crisis phases of chronic myelogenous leukemia (CML). These defects are linked to a reduced frequency, as well as defective self-renewal capacity of the cancer stem-cell population, in mouse models and in human CML patient samples. At a molecular level, the loss of beta-arrestin2 leads to a significant inhibition of beta-catenin stabilization, and ectopic activation of Wnt signaling reverses the defects observed in the beta-arrestin2 mutant cells. These data cumulatively show that beta-arrestin2 is essential for CML disease propagation and indicate that beta-arrestins and the Wnt/beta-catenin pathway lie in a signaling hierarchy in the context of CML cancer stem cell maintenance.