Most colorectal cancers (CRC) are initiated by mutations of APC, leading to increased β-catenin-mediated signaling. However, continued requirement of Wnt/β-catenin signaling for tumor progression in the context of acquired KRAS and other mutations is less well-established. To attenuate Wnt/β-catenin signaling in tumors, we have developed potent and specific small-molecule tankyrase inhibitors, G007-LK and G244-LM, that reduce Wnt/β-catenin signaling by preventing poly(ADP-ribosyl)ation-dependent AXIN degradation, thereby promoting β-catenin destabilization. We show that novel tankyrase inhibitors completely block ligand-driven Wnt/β-catenin signaling in cell culture and display approximately 50% inhibition of APC mutation-driven signaling in most CRC cell lines. It was previously unknown whether the level of AXIN protein stabilization by tankyrase inhibition is sufficient to impact tumor growth in the absence of normal APC activity. Compound G007-LK displays favorable pharmacokinetic properties and inhibits in vivo tumor growth in a subset of APC-mutant CRC xenograft models. In the xenograft model most sensitive to tankyrase inhibitor, COLO-320DM, G007-LK inhibits cell-cycle progression, reduces colony formation, and induces differentiation, suggesting that β-catenin-dependent maintenance of an undifferentiated state may be blocked by tankyrase inhibition. The full potential of the antitumor activity of G007-LK may be limited by intestinal toxicity associated with inhibition of Wnt/β-catenin signaling and cell proliferation in intestinal crypts. These results establish proof-of-concept antitumor efficacy for tankyrase inhibitors in APC-mutant CRC models and uncover potential diagnostic and safety concerns to be overcome as tankyrase inhibitors are advanced into the clinic.