Background: Most cases of colorectal cancer (CRC) are initiated by inactivation mutations in the APC gene, which is a negative regulator of the Wnt-β-catenin pathway. Patients with familial adenomatous polyposis (FAP) inherit a germline mutation in one APC allele, and loss of the second allele leads to the development of polyps that will turn malignant if not removed. It is not fully understood which molecular mechanisms are activated by APC loss and when the loss of the second APC allele occurs. Methods: Two FAP human embryonic stem cell (hESCs) lines were derived from APC mutated embryos following pre-implantation genetic diagnosis (PGD) for FAP. These FAP-hESCs were cultured in vitro and following extended culture: 1) β-catenin expression was analyzed by Western blot analysis; 2) Wnt-β-catenin/TCF-mediated transcription luciferase assay was performed; 3) cellular localization of β-catenin was evaluated by immunoflorecence confocal microscopy; and 4) DNA sequencing of the APC gene was performed. Results: We have established a novel human in-vitro model for studying malignant transformation, using hESCs that carry a germline mutation in the APC gene following PGD for FAP. Extended culturing of FAP1 hESCs led to activation of the Wnt signaling pathway, as demonstrated by enhanced β-catenin/TCF-mediated activity. Additionally, β-catenin showed a distinct perinuclear distribution in most (91 %) of the FAP1 hESCs high passage colonies. DNA sequencing of the whole gene detected several polymorphisms in FAP1 hESCs, however, no somatic mutations were discovered in the APC gene. On the other hand, no changes in β-catenin were detected in the FAP2 hESCs, demonstrating the natural diversity of the human FAP population. Conclusions: Our results describe the establishment of novel hESC lines from FAP patients with a predisposition for cancer mutation. These cells can be maintained in culture for long periods of time and may serve as a platform for studying the initial molecular and cellular changes that occur during early stages of malignant transformation.