Axin forms a complex with adenomatous polyposis coli gene product (APC), glycogen synthase kinase-3beta (GSK-3beta), and beta-catenin through different binding sites and downregulates beta-catenin. GSK-3beta-dependent phosphorylation of APC-(1211-2075) which has the Axin-binding site was facilitated by Axin, but that of APC-(959-1338) which lacks the Axin-binding site was not. Axin-(298-506) or Axin-(298-832), which has the GSK-3beta- and beta-catenin- but not APC-binding sites, did not enhance GSK-3beta-dependent phosphorylation of either APC-(1211-2075) or APC-(959-1338). Furthermore, beta-catenin stimulated the phosphorylation of APC-(959-1338) and APC-(1211-2075) by GSK-3beta in the presence of Axin. Consistent with these in vitro observations, expression of beta-catenin or Axin in COS cells promoted an SDS gel band shift of APC. These results indicate that APC complexed with Axin is effectively phosphorylated by GSK-3beta and that beta-catenin may modulate this phosphorylation. In addition, the heterodimeric form of protein phosphatase 2A (PP2A) directly bound to Axin, and PP2A complexed with Axin dephosphorylated APC phosphorylated by GSK-3beta. Taken together, these results suggest that GSK-3beta-dependent phosphorylation of APC can be modulated by beta-catenin and PP2A complexed with Axin.