Axin regulates Wnt signaling through down-regulation of beta-catenin. To test the role of Wnt signaling in neuronal differentiation, embryonal carcinoma P19 cells (P19 EC), which can be stimulated to differentiate into a neuron-like phenotype in response to retinoic acid (RA), were used. Reverse transcription-PCR and Western blot analysis showed that Axin is expressed in undifferentiated cells, whereas the level is clearly reduced during RA-induced neuronal differentiation. Interestingly, Axin levels were not reduced during endodermal differentiation of P19 EC cells and F9 EC cells by RA, suggesting that the reduction of the Axin level is a specific property of neuronal differentiation. Western analysis showed that the cytoplasmic level of beta-catenin increased during neuronal differentiation of P19 EC cells. Indirect immunofluorescence with beta-catenin antibody showed that the localization of beta-catenin was changed from membrane in undifferentiated cells to nuclei in neuronal P19 EC cells. Induced expression of Axin during endodermal and early neuronal differentiation, using the Tet-On system, did not block normal differentiation. However, maintenance of the Axin level blocked neuronal differentiation and inhibited expression of a neuron-specific marker protein, beta III-tubulin. Also, ectopic induction of a beta-catenin signaling inhibitor, ICAT, inhibited expression of beta III-tubulin. In contrast, addition of Wnt-3A-conditioned medium during the neuronal differentiation period enhanced the expression of beta III-tubulin. Overall, our data show that Wnt-3a/canonical beta-catenin signaling through the down-regulation of Axin may play an important role in neuronal differentiation.