Wnt signaling is known to be important for diverse embryonic and post-natal cellular events and be regulated by the proteins Dishevelled and Axin. Although Dishevelled is activated by Wnt and involved in signal transduction, it is not clear how Dishevelled-mediated signaling is turned off. We report that guanine nucleotide binding protein beta 2 (Gnb2; Gbeta2) bound to Axin and Gbeta2 inhibited Wnt mediated reporter activity. The inhibition involved reduction of the level of Dishevelled, and the Gbeta2gamma2 mediated reduction of Dishevelled was countered by increased expression of Axin. Consistent with these effects in HEK293T cells, injection of Gbeta2gamma2 into Xenopus embryos inhibited the formation of secondary axes induced either by XWnt8 or Dishevelled, but not by beta-catenin. The DEP domain of Dishevelled is necessary for both interaction with Gbeta2gamma2 and subsequent degradation of Dishevelled via the lysosomal pathway. Signaling induced by Gbeta2gamma2 is required because a mutant of Gbeta2, Gbeta2 (W332A) with lower signaling activity, had reduced ability to downregulate the level of Dishevelled. Activation of Wnt signaling by either of two methods, increased Frizzled signaling or transient transfection of Wnt, also led to increased degradation of Dishevelled and the induced Dishevelled loss is dependent on Gbeta1 and Gbeta2. Other studies with agents that interfere with PLC action and calcium signaling suggested that loss of Dishevelled is mediated through the following pathway: Wnt/Frizzled-->Gbetagamma-->PLC-->Ca(+2)/PKC signaling. Together the evidence suggests a novel negative feedback mechanism in which Gbeta2gamma2 inhibits Wnt signaling by degradation of Dishevelled.