Axin, a key modulator of the Wnt/beta-catenin pathway, acts as a scaffold protein in phosphorylating and degrading cytoplasmic beta-catenin. Canonical Wnt proteins appear to stabilize beta-catenin by inducing the interaction of LRP5/6 with Axin. This interaction requires the phosphorylation of the Ser or Thr residues in the PPPP(S/T)PX(T/S) motifs at the intracellular domain of LRP5/6. In this work, we identified a novel Axin-interacting protein, zinc-finger BED domain-containing 3 (Zbed3), by yeast two-hybrid screening. The interaction was confirmed in co-immunoprecipitation experiment in mammalian cells and in vitro pulldown assays. Moreover, we found Zbed3 also contains a PPPPSPT motif, which is crucial to its binding to Axin. The Ser and Thr residues in the motif appear to be also phosphorylated by glycogen synthase kinase 3beta (GSK3beta) and the CKI family kinases, as GSK3beta and CKIepsilon could enhance the interaction of Zbed3 with Axin. Mutation of the Ser (SA) or Thr (TA) residue to Ala in the motif markedly impaired its ability to interact with Axin. Expressing Zbed3, but not these mutants, led to inhibition of GSK3beta-mediated beta-catenin phosphorylation, cytoplasmic beta-catenin accumulation, and activation of lymphoid enhancer binding factor-1-dependent reporter gene transcription. Furthermore, knockdown of Zbed3 with RNA interference attenuated Wnt-induced beta-catenin accumulation, lymphoid enhancer binding factor-1-dependent luciferase reporter activity, and the Wnt target gene expression. These results together indicate that Zbed3 is a novel Axin-binding protein that is involved in Wnt/beta-catenin signaling modulation.