Axin is a central component of the canonical Wnt signaling pathway that interacts with the adenomatous polyposis coli protein APC and the kinase GSK3beta to downregulate the effector beta-catenin. In the nematode Caenorhabditis elegans, canonical Wnt signaling is negatively regulated by the highly divergent Axin ortholog PRY-1. Mutation of pry-1 leads to constitutive activation of BAR-1/beta-catenin-dependent Wnt signaling and results in a range of developmental defects. The pry-1 null phenotype is however not fully penetrant, indicating that additional factors may partially compensate for PRY-1 function. Here, we report the cloning and functional analysis of a second Axin-like protein, which we named AXL-1. We show that despite considerable sequence divergence with PRY-1 and other Axin family members, AXL-1 is a functional Axin ortholog. AXL-1 functions redundantly with PRY-1 in negatively regulating BAR-1/beta-catenin signaling in the developing vulva and the Q neuroblast lineage. In addition, AXL-1 functions independently of PRY-1 in negatively regulating canonical Wnt signaling during excretory cell development. In contrast to vertebrate Axin and the related protein Conductin, AXL-1 and PRY-1 are not functionally equivalent. We conclude that Axin function in C. elegans is divided over two different Axin orthologs that have specific functions in negatively regulating canonical Wnt signaling.