Axin is a recently discovered component of a multiprotein complex containing APC, beta-catenin, GSK3, and PP2A, which functions in the degradation of the beta-catenin protein. As part of WNT signal transduction, the function of the Axin complex is inhibited, leading to the accumulation of beta-catenin. The inappropriate stabilization of beta-catenin has been implicated in a range of human tumors. Two oncogenic mechanisms leading to beta-catenin stabilization are the loss of the APC tumor suppressor protein and the mutational activation of beta-catenin, such that the Axin/APC complex can no longer regulate it. Studies in Drosophila and mammalian tissue culture showed loss of Axin function interfered with beta-catenin turnover and activated beta-catenin/TCF-dependent transcription. Based on these observations, Axin was screened for mutations in a range of human tumor cell lines and primary breast tumor samples. We identified two sequence variants causing amino acid substitutions in four colon cancer cell lines, a Ser-to-Leu at residue 215 in LS513 and a Leu-to-Met at residue 396 in HCT-8, HCT-15, and DLD-1. The Axin L396M mutation was selected for further study since it lay within a region that was shown to interact with glycogen synthase kinase-3. Biochemical and functional studies showed that the L396M change interfered with Axin's ability to bind GSK3. Interestingly, this mutation and a neighboring L392M change differentially altered Axin's ability to interfere with two upstream activators of TCF-dependent transcription, Frat1 and Disheveled.