beta-Catenin-mediated Wnt signaling is essential in embryonic development and in adult tissues. Recent studies have demonstrated that Axin not only plays an important inhibitory role in coordinating beta-catenin degradation, but is itself degraded by the low-density-lipoprotein receptor-related protein (LRP)5/6 Wnt co-receptor. Here, we demonstrate that the endocytic adaptor molecule Disabled-2 (Dab2), which we have previously demonstrated to act as an inhibitor of beta-catenin signaling, interacts with Axin and prevents its interaction with and degradation by the LRP5 co-receptor, thereby increasing its half-life and stabilization. Dab2 levels induced during retinoic acid-induced differentiation of F9, or during transforming growth factor-beta-induced epithelial-mesenchymal transdifferentiation of mouse mammary epithelial cells result in the stabilization of Axin and concomitant inhibition of beta-catenin signaling. Ectopic expression of Dab2 in F9 cells as well as in transformed cell lines results in increased Axin expression and attenuation of Wnt-mediated signaling. We conclude that Dab2 may play an important role in the maintenance of the differentiated state and restrain Wnt-mediated proliferation through its association with and modulation of Axin.