Wnt proteins transduce their signals through dishevelled (Dvl) proteins to inhibit glycogen synthase kinase 3beta (GSK), leading to the accumulation of cytosolic beta-catenin and activation of TCF/LEF-1 transcription factors. To understand the mechanism by which Dvl acts through GSK to regulate LEF-1, we investigated the roles of Axin and Frat1 in Wnt-mediated activation of LEF-1 in mammalian cells. We found that Dvl interacts with Axin and with Frat1, both of which interact with GSK. Similarly, the Frat1 homolog GBP binds Xenopus Dishevelled in an interaction that requires GSK. We also found that Dvl, Axin and GSK can form a ternary complex bridged by Axin, and that Frat1 can be recruited into this complex probably by Dvl. The observation that the Dvl-binding domain of either Frat1 or Axin was able to inhibit Wnt-1-induced LEF-1 activation suggests that the interactions between Dvl and Axin and between Dvl and Frat may be important for this signaling pathway. Furthermore, Wnt-1 appeared to promote the disintegration of the Frat1-Dvl-GSK-Axin complex, resulting in the dissociation of GSK from Axin. Thus, formation of the quaternary complex may be an important step in Wnt signaling, by which Dvl recruits Frat1, leading to Frat1-mediated dissociation of GSK from Axin.