Lipid-modified Wnt/Wingless (Wg) proteins can signal to their target cells in a short- or long-range manner. How these hydrophobic proteins travel through the extracellular environment remains an outstanding question. Here, we report on a Wg binding protein, Secreted Wg-interacting molecule (Swim), that facilitates Wg diffusion through the extracellular matrix. Swim, a putative member of the Lipocalin family of extracellular transport proteins, binds to Wg with nanomolar affinity in a lipid-dependent manner. In quantitative signaling assays, Swim is sufficient to maintain the solubility and activity of purified Wg. In Drosophila, swim RNAi phenotypes resemble wg loss-of-function phenotypes in long-range signaling. We propose that Swim is a cofactor that promotes long-range Wg signaling in vivo by maintaining the solubility of Wg.