Control of stability of beta-catenin is central in the wnt signaling pathway. Here, the protein conductin was found to form a complex with both beta-catenin and the tumor suppressor gene product adenomatous polyposis coli (APC). Conductin induced beta-catenin degradation, whereas mutants of conductin that were deficient in complex formation stabilized beta-catenin. Fragments of APC that contained a conductin-binding domain also blocked beta-catenin degradation. Thus, conductin is a component of the multiprotein complex that directs beta-catenin to degradation and is located downstream of APC. In Xenopus embryos, conductin interfered with wnt-induced axis formation.