It is not yet understood how the enhanced expression of pancreatic adenocarcinoma up-regulated factor (PAUF; a novel oncogene identified in our recent studies), contributes to the oncogenesis of pancreatic cells. We herein report that PAUF up-regulates the expression and transcriptional activity of ${eta}$-catenin while the suppression of PAUF by shRNA down-regulates ${eta}$-catenin. The induction of ${eta}$-catenin by PAUF is mediated by the activities of Akt and GSK-$3{eta}$, but inhibition of downstream ERK does not reduce ${eta}$-catenin expression. To test whether PAUF emulates either the Wnt3a-mediated or the protein kinase A-mediated signaling pathway for the stabilization of ${eta}$-catenin, we examined the phosphorylation status of ${eta}$-catenin in the presence of PAUF compared with that of ${eta}$-catenin during treatment with Wnt3a or dibutyryl cAMP, a cell permeable cyclic AMP analogue. PAUF expression induces phosphorylation at Ser-33/37/Thr-41 and Ser-675 of ${eta}$-catenin but no phosphorylation at Ser-45, indicating that a unique phosphorylation pattern of ${eta}$-catenin is caused by PAUF. Finally, the expression of PAUF up-regulates both $cyclin-D1$ and $c-Jun$, target genes of ${eta}$-catenin, leading to a rapid proliferation of pancreatic cells; conversely decreased PAUF expression (by shRNA) results in the reduced proliferation of pancreatic cells. Treatment with hexachlorophene (an inhibitor of ${eta}$-catenin) reduces the proliferation of pancreatic cells despite the presence of PAUF. Taken together, we propose that PAUF can up-regulate and stabilize ${eta}$-catenin $via$ a novel pattern of phosphorylation, thereby contributing to the rapid proliferation of pancreatic cancer cells.