Misregulation of Wnt signaling is common in human cancer. The development of small molecule inhibitors against the Wnt receptor, frizzled (FZD), may have potential in cancer therapy. During small molecule screens, we observed binding of carbamazepine to the cysteine-rich domain (CRD) of the Wnt receptor FZD8 using surface plasmon resonance (SPR). Cellular functional assays demonstrated that carbamazepine can suppress FZD8-mediated Wnt/β-catenin signaling. We determined the crystal structure of the complex at 1.7 Å resolution, which reveals that carbamazepine binds at a novel pocket on the FZD8 CRD. The unique residue Tyr52 discriminates FZD8 from the closely related FZD5 and other FZDs for carbamazepine binding. The first small molecule-bound FZD structure provides a basis for anti-FZD drug development. Furthermore, the observed carbamazepine-mediated Wnt signaling inhibition may help to explain the phenomenon of bone loss and increased adipogenesis in some patients during long-term carbamazepine treatment.