During Drosophila development, the naked cuticle (nkd) gene attenuates wingless/Wnt signaling through a negative feedback loop mechanism. Fly and vertebrate Nkd proteins contain a putative calcium-binding EF-hand motif, the EFX domain, that interacts with the basic/PDZ region of the Wnt signal transducer, dishevelled (Dsh). Here we show that Dsh binding by Drosophila Nkd in vitro is mediated by the EFX domain as well as an adjacent C-terminal sequence. In vivo data suggest that both of these regions contribute to the ability of Nkd to antagonize Wnt signaling. Mutations in the Nkd EF-hand designed to eliminate potential ion binding affected Nkd-Dsh interactions in the yeast two-hybrid assay but not in the glutathione S-transferase pull-down assay. Addition of the chelating agent EDTA abolished the in vitro Nkd-Dsh interaction. Surprisingly zinc, but not calcium, was able to restore Nkd-Dsh binding, suggesting a zinc-mediated interaction. Calcium 45- and zinc 65-blotting experiments show that Nkd is a zinc-binding metalloprotein. The results further clarify how Nkd may antagonize Wnt signaling via interaction with Dsh, and identify a novel zinc-binding domain in Drosophila Nkd that collaborates with the conserved EFX domain to bind Dsh.