The adaptor molecule Disabled‐2 (Dab2) has been shown to link cell surface receptors to downstream signaling pathways. Using a small‐pool cDNA screening strategy, we identify that the N‐terminal domain of Dab2 interacts with Dishevelled‐3 (Dvl‐3), a signaling mediator of the Wnt pathway. Ectopic expression of Dab2 in NIH‐3T3 mouse fibroblasts attenuates canonical Wnt/β‐catenin‐mediated signaling, including accumulation of β‐catenin, activation of β‐catenin/T‐cell‐specific factor/lymphoid enhancer‐binding factor 1‐dependent reporter constructs, and endogenous cyclin D1 induction. Wnt stimulation leads to a time‐dependent dissociation of endogenous Dab2–Dvl‐3 and Dvl‐3–axin interactions in NIH‐3T3 cells, while Dab2 overexpression leads to maintenance of Dab2–Dvl‐3 association and subsequent loss of Dvl‐3–axin interactions. In addition, we find that Dab2 can associate with axin in vitro and stabilize axin expression in vivo. Mouse embryo fibroblasts which lack Dab2 exhibit constitutive Wnt signaling as evidenced by increased levels of nuclear β‐catenin and cyclin D1 protein levels. Based on these results, we propose that Dab2 functions as a negative regulator of canonical Wnt signaling by stabilizing the β‐catenin degradation complex, which may contribute to its proposed role as a tumor suppressor.