Cadherins and catenins are thought to promote adhesion between pre and postsynaptic elements in the brain. Here we show a role for beta-catenin in localizing the reserved pool of vesicles at presynaptic sites. Deletion of beta-catenin in hippocampal pyramidal neurons in vivo resulted in a reduction in the number of reserved pool vesicles per synapse and an impaired response to prolonged repetitive stimulation. This corresponded to a dispersion of vesicles along the axon in cultured neurons. Interestingly, these effects are not due to beta-catenin's involvement in cadherin-mediated adhesion or wnt signaling. Instead, beta-catenin modulates vesicle localization via its PDZ binding domain to recruit PDZ proteins such as Veli to cadherin at synapses. This study defines a specific role for cadherins and catenins in synapse organization beyond their roles in mediating cell adhesion.