The Wnt signalling pathway regulates many developmental processes through a complex of beta-catenin and the T-cell factor/lymphoid enhancer factor (TCF/LEF) family of high-mobility-group transcription factors(1-5). Wnt stabilizes cytosolic beta-catenin, which then binds to TCF and activates gene transcription. This signalling cascade is conserved in vertebrates, Drosophila and Caenorhabditis elegans. In C. elegans, the proteins MOM-4 and LIT-I regulate Wnt signalling to polarize responding cells during embryogenesis(6). MOM-4 and LIT-1 are homologous to TAK1 (a kinase activated by transforming growth factor-beta) mitogen-activated protein-kinase-kinase kinase (MAP3K)(7) and MAP kinase (MAPK)-related NEMO-like kinase (NLK)(8,9), respectively, in mammalian cells. These results raise the possibility that TAK1 and NLK are also involved in Wnt signalling in mammalian cells. Here we show that TAK1 activation stimulates NLK activity and downregulates transcriptional activation mediated by beta-catenin and TCF. Injection of NLK suppresses the induction of axis duplication by microinjected beta-catenin in Xenopus embryos. NLK phosphorylates TCF/LEF factors and inhibits the interaction of the beta-catenin-TCF complex with DNA. Thus, the TAK1-NLK-MAPK-like pathway negatively regulates the Wnt signalling pathway.