Members of the Dickkopf (Dkk) family of Wnt antagonists interrupt Wnt-induced receptor assembly and participate in axial patterning and cell fate determination. One family member, DKK3, does not block Wnt receptor activation. Loss of Dkk3 expression in cancer is associated with hyperproliferation and dysregulated ß-catenin signaling, and ectopic expression of Dkk3 halts cancer growth. The molecular events mediating the DKK3-dependent arrest of ß-catenin-driven cell proliferation in cancer cells are unknown. Here we report the identification of a new intracellular gene product originating from the Dkk3 locus. This Dkk3b transcript originates from a second transcriptional start site located in intron 2 of the Dkk3 gene. It is essential for early mouse development and is a newly recognized regulator of ß-catenin signaling and cell proliferation. Dkk3b interrupts nuclear translocation ß-catenin by capturing cytoplasmic, unphosphorylated ß-catenin in an extra-nuclear complex with ß-TrCP. These data reveal a new regulator of one of the most studied signal transduction pathways in metazoans and provides a novel, completely untapped therapeutic target for silencing the aberrant ß-catenin signaling that drives hyperproliferation in many cancers.