Tyrosine kinase inhibitor (TKI) resistance and progression to blast crisis (BC), both related to persistent β-catenin activation, remain formidable challenges for chronic myeloid leukemia (CML). We observed overexpression of β-catenin in BC-CML stem/progenitor cells, particularly in granulocyte–macrophage progenitors, and highest among a novel CD34+ CD38+ CD123 hi Tim-3 hi subset as determined by CyTOF analysis. Co-culture with mesenchymal stromal cells (MSCs) induced the expression of β-catenin and its target CD44 in CML cells. A novel Wnt/β-catenin signaling modulator, C82, and nilotinib synergistically killed KBM5 T315I and TKI-resistant primary BC-CML cells with or without BCR–ABL kinase mutations even under leukemia/MSC co-culture conditions. Silencing of β-catenin by short interfering RNA restored sensitivity of primary BCR–ABL T315I/E255V BC-CML cells to nilotinib. Combining the C82 pro-drug, PRI-724, with nilotinib significantly prolonged the survival of NOD/SCID/IL2Rγ null mice injected with primary BCR–ABL T315I/E255V BC-CML cells. The combined treatment selectively targeted CML progenitors and inhibited CD44, c-Myc, survivin, p-CRKL and p-STAT5 expression. In addition, pretreating primary BC-CML cells with C82, or the combination, but not with nilotinib alone, significantly impaired their engraftment potential in NOD/SCID/IL2Rγ-null-3/GM/SF mice and significantly prolonged survival. Our data suggest potential benefit of concomitant β-catenin and Bcr–Abl inhibition to prevent or overcome Bcr–Abl kinase-dependent or-independent TKI resistance in BC-CML.