The Wnt signaling pathway controls numerous cell fates during animal development. Its inappropriate activity can lead to cancer in many human tissues. A key effector of the canonical Wnt pathway is beta-catenin (or Drosophila Armadillo), a highly unstable phosphorylated protein that shuttles rapidly between nucleus and cytoplasm. Wnt signaling inhibits its phosphorylation and degradation; this allows it to associate with TCF/LEF factors bound to Wnt target genes and to stimulate their transcription by recruiting chromatin modifying and remodeling factors. The transcriptional activity of Armadillo/beta-catenin also depends on Pygopus (Pygo), a nuclear protein with which it associates through the Legless/BCL9 adaptor. It has been proposed that Pygo associates with TCF target genes during Wnt signaling through Armadillo and Legless to recruit a transcriptional coactivator through its Nbox motif. Here, we report that Pygo is associated constitutively with dTCF target genes in Drosophila salivary glands and tissue-culture cells. Our evidence indicates that this association depends on dTCF and on the Nbox motif of Pygo, but not on Legless. We thus propose an alternative model according to which Pygo functions at the onset of Wnt signaling, or at low signaling levels, to capture Armadillo at dTCF target genes, thus enabling the interaction between Armadillo and dTCF and, consequently, the Armadillo-mediated recruitment of transcriptional coactivators.