Zic3 controls neuroectodermal differentiation and left-right patterning in Xenopus laevis embryos. Here we demonstrate that Zic3 can suppress Wnt/beta-catenin signaling and control development of the notochord and Spemann's organizer. When we overexpressed Zic3 by injecting its RNA into the dorsal marginal zone of 2-cell-stage embryos, the embryos lost mesodermal dorsal midline structures and showed reduced expression of organizer markers (Siamois and Goosecoid) and a notochord marker (Xnot). Co-injection of Siamois RNA partially rescued the reduction of Xnot expression caused by Zic3 overexpression. Because the expression of Siamois in the organizer region is controlled by Wnt/beta-catenin signaling, we subsequently examined the functional interaction between Zic3 and Wnt signaling. Co-injection of Xenopus Zic RNAs and beta-catenin RNA with a reporter responsive to the Wnt/beta-catenin cascade indicated that Zic1, Zic2, Zic3, Zic4, and Zic5 can all suppress beta-catenin-mediated transcriptional activation. In addition, co-injection of Zic3 RNA inhibited the secondary axis formation caused by ventral-side injection of beta-catenin RNA in Xenopus embryos. Zic3-mediated Wnt/beta-catenin signal suppression required the nuclear localization of Zic3, and involved the reduction of beta-catenin nuclear transport and enhancement of beta-catenin degradation. Furthermore. Zic3 co-precipitated with Tcf1 (a (beta-catenin co-factor) and XIC (I-mfa domain containing factor required for dorsoanterior development). The findings in this report produce a novel system for fine-tuning of Wnt/beta-catenin signaling. (C) 2011 Elsevier Inc. All rights reserved.