The R-Spondin (Rspo) family of secreted Wnt modulators is involved in development and disease and holds therapeutic promise as stem cell growth factors. Despite growing biological importance, their mechanism of action is poorly understood. Here, we show that Rspo3 binds syndecan 4 (Sdc4) and that together they activate Wnt/PCP signaling. In Xenopus embryos, Sdc4 and Rspo3 are essential for two Wnt/PCP-driven processes-gastrulation movements and head cartilage morphogenesis. Rspo3/PCP signaling during gastrulation requires Wnt5a and is transduced via Fz7, Dvl, and JNK. Rspo3 functions by inducing Sdc4-dependent, clathrin-mediated endocytosis. We show that this internalization is essential for PCP signal transduction, suggesting that endocytosis of Wnt-receptor complexes is a key mechanism by which R-spondins promote Wnt signaling.