Endocardial cushion formation is essential for heart valve development and heart chamber separation. Abnormal endocardial cushion formation often causes congenital heart defects. β-Catenin is known to be essential for endocardial cushion formation; however, the underlying cellular and molecular mechanisms remain incompletely understood. Here, we show that endothelial-specific deletion of β-catenin in mice resulted in formation of hypoplastic endocardial cushions due to reduced cell proliferation and impaired cell migration. By using a β-catenin DM allele in which the transcriptional function of β-catenin is selectively disrupted, we further reveal that β-catenin regulated cell proliferation and migration through its transcriptional and non-transcriptional function, respectively. At the molecular level, loss of β-catenin resulted in increased expression of cell cycle inhibitor p21 in cushion endocardial and mesenchymal cells in vivo. In vitro rescue experiments with HUVECs and pig aortic valve interstitial cells confirmed that β-catenin promoted cell proliferation by suppressing p21. In addition, one savvy negative observation is that β-catenin was dispensable for endocardial-to-mesenchymal fate change. Taken together, our findings demonstrate that β-catenin is essential for cell proliferation and migration but dispensable for endocardial cells to gain mesenchymal fate during endocardial cushion formation. Mechanistically, β-catenin promotes cell proliferation by suppressing p21. These findings inform the potential role of β-catenin in the etiology of congenital heart defects.