c-myc is frequently amplified in breast cancer; however, the mechanism of myc-induced mammary epithelial cell transformation has not been defined. We show that c-Myc induces a profound morphological transformation in human mammary epithelial cells and anchorage-independent growth. c-Myc suppresses the Wnt inhibitors DKK1 and SFRP1, and derepression of DKK1 or SFRP1 reduces Myc-dependent transforming activity. Myc-dependent repression of DKK1 and SFRP1 is accompanied by Wnt target gene activation and endogenous T-cell factor activity. Myc-induced mouse mammary tumors have repressed SFRP1 and increased expression of Wnt target genes. DKK1 and SFRP1 inhibit the transformed phenotype of breast cancer cell lines, and DKK1 inhibits tumor formation. We propose a positive feedback loop for activation of the c-myc and Wnt pathways in breast cancer.