To clarify the role of hepatoma-derived growth factor (HDGF) and beta-catenin in carcinogenesis of colorectal cancer (CRC), our results showed that high HDGF expression was found in CRC cells and tissues and significantly related to histological differentiation (p = 0.035) and lymph node metastasis (p = 0.000). Significant positive correlation between HDGF expression and beta-catenin abnormal expression was found in CRC tissues. High HDGF and lymph node metastasis were the strong independent prognostic indicators for reduced overall survival in CRC patients. HDGF knockdown dramatically inhibited cellular proliferation, migration, invasion, and tumorigenesis, both in vitro and in vivo, but induced G1 phase arrest and apoptosis in CRC cells. HDGF knock-down dramatically suppressed beta-catenin and its down-stream genes expression in CRC cells. Intriguingly, beta-catenin knock-down dramatically suppressed HDGF expression in CRC cells. Human recombinant Wnt3a and DKK1 treatment increased and decreased HDGF, beta-catenin, c-Myc, cyclin D1, MMP9, and phos-GSK-3 beta (Ser9) protein expression in nuclear and cytoplasmic fraction of CRC cells upon beta-catenin knock-down, respectively. Three HDGF-binding elements in beta-catenin promoter were found and specific for transcriptional activation of beta-catenin in CRC cells. In conclusion, our results first suggest that HDGF and beta-catenin interacts as a positive feedback loop, which plays an important role in carcinogenesis and progression of CRC.