DP1, a dimerization partner protein of the transcription factor E2F, is known to inhibit Wnt/β‐catenin signalling along with E2F, although the function of DP1 itself was not well characterized. Here, we present a novel dual regulatory mechanism of Wnt/β‐catenin signalling by DP1 independent from E2F. DP1 negatively regulates Wnt/β‐catenin signalling by inhibiting Dvl–Axin interaction and by enhancing poly‐ubiquitination of β‐catenin. In contrast, DP1 positively modulates the signalling upon Wnt stimulation, via increasing cytosolic β‐catenin and antagonizing the kinase activity of NLK. In Xenopus embryos, DP1 exerts both positive and negative roles in Wnt/β‐catenin signalling during anteroposterior neural patterning. From subcellular localization analyses, we suggest that the dual roles of DP1 in Wnt/β‐catenin signalling are endowed by differential nucleocytoplasmic localizations. We propose that these dual functions of DP1 can promote and stabilize biphasic Wnt‐on and Wnt‐off states in response to a gradual gradient of Wnt/β‐catenin signalling to determine differential cell fates.