Cellular FLIP (cFLIP) is a close homologue of caspase 8 without caspase activity that inhibits Fas signaling. The cFLIP protein is often expressed in human tumors and is believed to suppress antitumor immune responses involving the Fas system. Here, we report that a long form of cFLIP (cFLIP-L) inhibits beta-catenin ubiquitylation and increases endogenous cytosolic beta-catenin, which results in translocation of beta-catenin into nuclei and induction of beta-catenin-dependent gene expression in cFLIP-L-expressing cells. When cells stably expressing cFLIP-L were stimulated with Wnt3a, enhanced Wnt signaling was observed compared with the control cells. Conversely, depletion of endogenous cFLIP results in reduced Wnt signaling. Furthermore, cFLIP-L increases secondary-body axis formation when coinjected with suboptimal doses of beta-catenin into early Xenopus embryos. Down-regulation of FADD by RNA-mediated interference abolishes the beta-catenin-dependent gene expression induced by cFLIP-L. These results indicate that cFLIP-L, in cooperation with FADD, enhances canonical Wnt signaling by inhibiting proteasomal degradation of beta-catenin, thus suggesting an additional mechanism involved with tumorgenesis, in addition to inhibiting Fas signaling.