Dysregulation of Wnt-beta-catenin signaling disrupts axis formation in vertebrate embryos and underlies multiple human malignancies. The adenomatous polyposis coli (APC) protein, axin, and glycogen synthase kinase 3beta form a Wnt-regulated signaling complex that mediates the phosphorylation-dependent degradation of beta-catenin. A protein phosphatase 2A (PP2A) regulatory subunit, B56, interacted with APC in the yeast two-hybrid system. Expression of B56 reduced the abundance of beta-catenin and inhibited transcription of beta-catenin target genes in mammalian cells and Xenopus embryo explants. The B56-dependent decrease in beta-catenin was blocked by oncogenic mutations in beta-catenin or APC, and by proteasome inhibitors. B56 may direct PP2A to dephosphorylate specific components of the APC-dependent signaling complex and thereby inhibit Wnt signaling.