The canonical Wnt/beta-catenin pathway is a highly conserved signaling cascade that is involved in development and stem cell renewal. The deregulation of this pathway is often associated with increased cell growth and neoplasia. The small GTPase Rac has been shown to influence canonical Wnt signaling by regulating beta-catenin stability through an unknown mechanism. We report that DOCK4, a guanine nucleotide exchange factor (GEF) for Rac and a member of the CDM family of unconventional GEFs, mediates Wnt-induced Rac activation in the canonical Wnt/beta-catenin pathway. DOCK4 expression regulates cellular beta-catenin levels in response to the Wnt signal, in vitro. Biochemical studies demonstrate that DOCK4 interacts with the beta-catenin degradation complex, consisting of the proteins adenomatosis polyposis coli, Axin and glycogen synthase kinase 3beta (GSK3beta). This molecular interaction enhances beta-catenin stability and Axin degradation. Furthermore, we observe that DOCK4 is phosphorylated by GSK3beta, which enhances Wnt-induced Rac activation. Using a T-cell factor reporter zebrafish we confirm that DOCK4 is required for Wnt/beta-catenin activity, in vivo. These results elucidate a novel intracellular signaling mechanism in which a Rac GEF, DOCK4 acts as a scaffold protein in the Wnt/beta-catenin pathway.