Dax-1 [dosage-sensitive sex reversal-adrenal hypoplasia congenita critical region on the X chromosome, gene 1 (NR0B1)] is an orphan nuclear receptor acting as a suppressor of Ad4 binding protein/steroidogenic factor 1 [Ad4BP/SF-1 (NR5A1)] and as an anti-Sry factor in the process of gonadal sex differentiation. The roles of these nuclear receptors in the differentiation of the gonads and the adrenal cortex have been established through studies of the mutant phenotype in both mice and humans. However, the mechanisms underlying transcriptional regulation of these genes remain largely unknown. Here, we examined the relationship between Dax-1 gene transcription and the Wnt4 pathway. Reporter gene analysis revealed that Dax-1 gene transcription was activated by beta-catenin, a key signal-transducing protein in the Wnt pathway, acting in synergy with Ad4BP/SF-1. Interaction between beta-catenin and Ad4BP/SF-1 was observed using yeast two-hybrid and in vitro pull-down assays. The region of Ad4BP/SF-1 essential for this interaction consists of an acidic amino acid cluster, which resides in the first helix of the ligand-binding domain. Mutation of the amino acid cluster impaired transcriptional activation of Dax-1 as well as interaction of Ad4BP/SF-1 with beta-catenin. These results were supported by in vivo observations using Wnt4 gene-disrupted mice, in which Dax-1 gene expression was decreased significantly in sexually differentiating female gonads. We thus conclude that Wnt4 signaling mediates the increased expression of Dax-1 as the ovary becomes sexually differentiated.