T cells must undergo two critical differentiation processes before they become competent effectors that can mediate actual immune responses. Progenitor T cells undergo defined stages of differentiation in the thymus, which include positive and negative selection, to generate a repertoire of T cells that will respond to foreign but not self antigens. When these immunocompetent T cells first migrate out of thymus into peripheral lymphoid tissues, they are naïve and are unable to mediate immune responses. However, upon antigen encounter, peripheral CD4+ naïve T cells undergo another differentiation process to become armed effector T cells including Th1, Th2, Th17 or regulatory T cells, all of which are capable of regulating immune responses. A canonical Wnt/β-catenin/T cell factor (TCF) pathway has been shown to regulate T cell differentiation in both the thymus and in peripheral lymphoid tissues. Dysfunction of this pathway at any stage of T cell differentiation could lead to severe autoimmunity including experimental autoimmune encephalomyelitis or immune deficiency. Understanding the role played by β-catenin/TCF-1 in T cell differentiation will facilitate our understanding of the mechanisms that regulate T cell function and assist in identifying novel therapy targets for treating both autoimmune and immune diseases. Therefore, in this review, we will focus on the function of β-catenin/TCF-1 pathway in the regulation of thymic and peripheral T cell differentiation processes.