To understand how the Wnt coreceptor LRP-5 is involved in transducing the canonical Wnt signals, we identified Axin as a protein that interacts with the intracellular domain of LRP-5. LRP-5, when expressed in fibroblast cells, showed no effect on the canonical Wnt signaling pathway by itself, but acted synergistically with Wnt. In contrast, LRP-5 mutants lacking the extracellular domain functioned as constitutively active forms that bind Axin and that induce LEF-1 activation by destabilizing Axin and stabilizing β-catenin. Addition of Wnt caused the translocation of Axin to the membrane and enhanced the interaction between Axin and LRP-5. In addition, the LRP-5 sequences involved in interactions with Axin are required for LEF-1 activation. Thus, we conclude that the binding of Axin to LRP-5 is an important part of the Wnt signal transduction pathway.