Wnt genes encode secreted signalling molecules involved in a number of basic developmental processes. In Drosophila, wingless and DWnt-4 are two physically clustered Wnt genes, which are transcribed in overlapping patterns during embryogenesis and, in several instances, are controlled by the same regulatory molecules. To address the question of the functional relationship of wingless and DWnt-4, we analysed how embryonic cells respond when they are exposed, simultaneously or not, to the encoded Wnt signals. We show that DWnt-4 has the capacity to antagonise Wingless signalling both in the Drosophila ventral epidermis and in a heterologous system, the Xenopus embryo. We provide evidence that DWnt-4 inhibits the Wingless/Wnt-1 signalling pathway upstream of the activation of transcriptional targets. This is the first report that antagonising Wnt signals exist in Drosophila.