In mammalian urorectal development, the urorectal septum (urs) descends from the ventral body wall to the cloaca membrane (cm) to partition the cloaca into urogenital sinus and rectum. Defective urs growth results in human congenital anorectal malformations (ARMs), and their pathogenic mechanisms are unclear. Recent studies only focused on the importance of urs mesenchyme proliferation, which is induced by endoderm-derived Sonic Hedgehog (Shh). Here, we showed that the programmed cell death of the apical urs and proximal cm endoderm is particularly crucial for the growth of urs during septation. The apoptotic endoderm was closely associated with the tempo-spatial expression of Wnt inhibitory factor 1 (Wif1), which is an inhibitor of Wnt-β-catenin signaling. In Wif1(lacZ/lacZ) mutant mice and cultured urorectum with exogenous Wif1, cloaca septation was defective with undescended urs and hypospadias-like phenotypes, and such septation defects were also observed in Shh(-/-) mutants and in endodermal β-catenin gain-of-function (GOF) mutants. In addition, Wif1 and Shh were expressed in a complementary manner in the cloaca endoderm, and Wif1 was ectopically expressed in the urs and cm associated with excessive endodermal apoptosis and septation defects in Shh(-/-) mutants. Furthermore, apoptotic cells were markedly reduced in the endodermal β-catenin GOF mutant embryos, which counteracted the inhibitory effects of Wif1. Taken altogether, these data suggest that regulated expression of Wif1 is critical for the growth of the urs during cloaca septation. Hence, Wif1 governs cell apoptosis of urs endoderm by repressing β-catenin signal, which may facilitate the protrusion of the underlying proliferating mesenchymal cells towards the cm for cloaca septation. Dysregulation of this endodermal Shh-Wif1-β-catenin signaling axis contributes to ARM pathogenesis.