Fibroblast growth factor (FGF) and Wnt signals are both critical for proper bone development. We previously reported that the expression of activating FGF receptor mutations in osteoblasts downregulated the expression of many genes reported as targets of Wnt signaling, suggesting an antagonistic effect between Wnt signaling, which promotes osteoblast differentiation and function, and FGF signaling, which inhibits these processes. To analyze the effect of FGF on Wnt signaling in osteoblasts, we created reporter cell lines where a Wnt-responsive promoter drives luciferase expression and showed that Wnt3a-induced luciferase expression was specifically inhibited by FGF treatment. FGF specifically prevented the formation of a Wnt-induced transcriptional complex of TCF1 and -4 with beta-catenin on DNA. FGF did not significantly affect the activation of beta-catenin, although it reduced both the expression of TCF/LEF factors and their induction by Wnt. Microarray analysis using osteoblasts treated with Wnt3a and FGF alone or in combination showed that about 70% of the genes induced by Wnt3a were downregulated by combined FGF treatment. These included novel and previously identified Wnt target genes and genes involved in osteoblast differentiation. Furthermore, FGF alone could downregulate the expression of four Fzd Wnt receptor genes. Our results show that FGF antagonizes Wnt signaling by inhibiting Wnt-induced transcription and suggest that multiple mechanisms, including downregulation of TCFs and Wnt receptors, contribute to this effect.