Wnt/β-catenin signaling controls numerous steps in normal animal development and can also cause cancer if inappropriately activated. In the absence of Wnt, β-catenin is targeted continuously for proteasomal degradation by the Axin destruction complex, whose activity is blocked upon Wnt stimulation by Dishevelled, which recruits Axin to the plasma membrane and assembles it into a signalosome. This key event during Wnt signal transduction depends on dynamic head-to-tail polymerization by the DIX domain of Dishevelled. Here, we use rescue assays in Drosophila tissues and functional assays in human cells to show that polymerization-blocking mutations in the DIX domain of Axin disable its effector function in down-regulating Armadillo/β-catenin and its response to Dishevelled during Wnt signaling. Intriguingly, NMR spectroscopy revealed that the purified DIX domains of the two proteins interact with each other directly through their polymerization interfaces, whereby the same residues mediate both homo- and heterotypic interactions. This result implies that Dishevelled has the potential to act as a "natural" dominant-negative, binding to the polymerization interface of Axin's DIX domain to interfere with its self-assembly, thereby blocking its effector function.