Wnt glycoproteins regulate homeostasis and development by binding to membrane Frizzled-LRP5/6 receptor complexes. Wnt signaling includes a canonical pathway involving cytosolic beta-catenin stabilization, nuclear translocation and gene regulation, acting as a co-activator of T-cell factor (TCF) proteins, and noncanonical pathways that activate Rho, Rac, JNK and PKC, or modulate Ca(2+) levels. DICKKOPF-1 (DKK-1) encodes a secreted Wnt antagonist that binds to LRP5/6 and induces its endocytosis, leading to inhibition of the canonical pathway. We show that activation of canonical signaling by Wnt1 or ectopic expression of active beta-catenin, TCF4 or LRP6 mutants induces transcription of the human DKK-1 gene. Multiple beta-catenin/TCF4 sites in the DKK-1 gene promoter contribute to this activation. In contrast, Wnt5a, which signals through noncanonical pathways, does not activate DKK-1. Northern and Western blot studies show that activation of the Wnt/beta-catenin pathway by treatment with lithium or Wnt3a-conditioned medium, or by stable expression of either Wnt1 or beta-catenin, increases DKK-1 RNA and protein, thus initiating a negative feedback loop. However, we found that DKK-1 expression decreases in human colon tumors, which suggests that DKK-1 acts as a tumor suppressor gene in this neoplasia. Our data indicate that the Wnt/beta-catenin pathway is downregulated by the induction of DKK-1 expression, a mechanism that is lost in colon cancer.