Although prominent FRAT/GBP exhibits a limited degree of homology to Axin, the binding sites on GSK3 for FRAT/GBP and Axin may overlap to prevent the effect of FRAT/GBP in stabilizing beta-catenin in the Wnt pathway. Using a yeast two-hybrid screen, we identified a novel protein, GSK3beta interaction protein (GSKIP), which binds to GSK3beta. We have defined a 25-amino acid region in the C-terminus of GSKIP that is highly similar to the GSK3beta interaction domain (GID) of Axin. Using an in vitro kinase assay, our results indicate that GSKIP is a good GSK3beta substrate, and both the full-length protein and a C-terminal fragment of GSKIP can block phosphorylation of primed and nonprimed substrates in different fashions. Similar to Axin GID(381-405) and FRATtide, synthesized GSKIPtide is also shown to compete with and/or block the phosphorylation of Axin and beta-catenin by GSK3beta. Furthermore, our data indicate that overexpression of GSKIP induces beta-catenin accumulation in the cytoplasm and nucleus as visualized by immunofluorescence. A functional assay also demonstrates that GSKIP-transfected cells have a significant effect on the transactivity of Tcf-4. Collectively, we define GSKIP as a naturally occurring protein that is homologous with the GSK3beta interaction domain of Axin and is able to negatively regulate GSK3beta of the Wnt signaling pathway.