Dorsal axis formation in the Xenopus embryo can be induced by the ectopic expression of several Wnt family members. In Drosophila, the protein encoded by the Wnt family gene, wingless, signals through a pathway that antagonizes the effects of the serine/threonine kinase zeste-white 3/shaggy. We describe the isolation and characterization of a Xenopus homolog of zeste-white 3/shaggy, Xgsk-3. A kinase-dead mutant of Xgsk-3, Xgsk-3K-->R, has a dominant negative effect and mimics the ability of Wnt to induce a secondary axis by induction of an ectopic Spemann organizer. Xgsk-3K-->R, like Wnt, induces dorsal axis formation when expressed in the deep vegetal cells, which do not contribute to the axis. These results indicate that the dorsal fate is actively repressed by Xgsk-3, which must be inactivated for dorsal axis formation to occur. Furthermore, our work suggests that the effects of Xgsk-3K-->R are mediated by an additional intercellular signal.