Participates in the Wnt signaling pathway. Binds to DNA and acts as a repressor in the absence of CTNNB1, and as an activator in its presence. Necessary for the terminal differentiation of epidermal cells, the formation of keratohyalin granules and the development of the barrier function of the epidermis. Binds the armadillo repeat of CTNNB1 and forms a stable complex. Detected in the basal layer of epidermis and in outer root sheath and bulge of hair follicles. The putative Groucho interaction domain between the N-terminal CTNNB1 binding domain and the HMG-box is necessary for repression of the transactivation mediated by TCF7L1 and CTNNB1. Belongs to the TCF/LEF family.