The wnt pathway regulates the steady state level of beta-catenin, a transcriptional coactivator for the Tcf3/Lef1 family of DNA binding proteins. We demonstrate that Tcf3 can inhibit beta-catenin turnover via its competition with axin and adenomatous polyposis for beta-catenin binding. A mutant of beta-catenin that cannot bind Tcf3 is degraded faster than the wild-type protein in Xenopus embryos and extracts. A fragment of beta-catenin and a peptide encoding the NH2 terminus of Tcf4 that block the interaction between beta-catenin and Tcf3 stimulate beta-catenin degradation, indicating this interaction normally plays an important role in regulating beta-catenin turnover. Tcf3 is a substrate for both glycogen synthase kinase (GSK) 3 and casein kinase (CK) 1epsilon, and phosphorylation of Tcf3 by CKIepsilon stimulates its binding to beta-catenin, an effect reversed by GSK3. Tcf3 synergizes with CK1epsilon to inhibit beta-catenin degradation, whereas CKI-7, an inhibitor of CK1epsilon, reduces the inhibitory effect of Tcf3. Finally, we provide evidence that CK1epsilon stimulates the binding of dishevelled (dsh) to GSk3 binding protein (GBP) in extracts. Along with evidence that a significant amount of Tcf protein is nonnuclear, these findings suggest that CK1epsilon can modulate wnt signaling in vivo by regulating both the beta-catenin-Tcf3 and the GBP-dsh interfaces.