The Wnt/beta-catenin signaling pathway regulates many developmental processes by modulating gene expression. Wnt signaling induces the stabilization of cytosolic beta-catenin, which then associates with lymphoid enhancer factor and T-cell factor (LEF-1/TCF) to form a transcription complex that activates Wnt target genes. Previously, we have shown that a specific mitogen-activated protein (MAP) kinase pathway involving the MAP kinase kinase kinase TAK1 and MAP kinase-related Nemo-like kinase (NLK) suppresses Wnt signaling. In this study, we investigated the relationships among NLK, beta-catenin, and LEF-1/TCF. We found that NLK interacts directly with LEF-1/TCF and indirectly with beta-catenin via LEF-1/TCF to form a complex. NLK phosphorylates LEF-1/TCF on two serine/threonine residues located in its central region. Mutation of both residues to alanine enhanced LEF-1 transcriptional activity and rendered it resistant to inhibition by NLK. Phosphorylation of TCF-4 by NLK inhibited DNA binding by the beta-catenin-TCF-4 complex. However, this inhibition was abrogated when a mutant form of TCF-4 was used in which both threonines were replaced with valines. These results suggest that NLK phosphorylation on these sites contributes to the down-regulation of LEF-1/TCF transcriptional activity.