Genetic and epigenetic defects in Wnt/β-catenin signaling play important roles in colorectal cancer progression. Here we identify DACT3, a member of the DACT (Dpr/Frodo) gene family, as a negative regulator of Wnt/β-catenin signaling that is transcriptionally repressed in colorectal cancer. Unlike other Wnt signaling inhibitors that are silenced by DNA methylation, DACT3 repression is associated with bivalent histone modifications. Remarkably, DACT3 expression can be robustly derepressed by a pharmacological combination that simultaneously targets both histone methylation and deacetylation, leading to strong inhibition of Dishevelled (Dvl)-mediated Wnt/β-catenin signaling and massive apoptosis of colorectal cancer cells. Our study identifies DACT3 as an important regulator of Wnt/β-catenin signaling in colorectal cancer and suggests a potential strategy for therapeutic control of Wnt/β-catenin signaling in colorectal cancer.