Wnt signaling pathways are involved in embryonic development and adult tissue maintenance and have been implicated in tumorigenesis. Dishevelled (Dvl/Dsh) protein is one of key components in Wnt signaling and plays essential roles in regulating these pathways through protein-protein interactions. Identifying and characterizing Dvl-binding proteins are key steps toward understanding biological functions. Given that the tripeptide VWV (Val-Trp-Val) binds to the PDZ domain of Dvl, we searched publically available databases to identify proteins containing the VWV motif at the C terminus that could be novel Dvl-binding partners. On the basis of the cellular localization and expression patterns of the candidates, we selected for further study the TMEM88 (target protein transmembrane 88), a two-transmembrane-type protein. The interaction between the PDZ domain of Dvl and the C-terminal tail of TMEM88 was confirmed by using NMR and fluorescence spectroscopy. Furthermore, in HEK293 cells, TMEM88 attenuated the Wnt/β-catenin signaling induced by Wnt-1 ligand in a dose-dependent manner, and TMEM88 knockdown by RNAi increased Wnt activity. In Xenopus, TMEM88 protein is sublocalized at the cell membrane and inhibits Wnt signaling induced by Xdsh but not β-catenin. In addition, TMEM88 protein inhibits the formation of a secondary axis normally induced by Xdsh. The findings suggest that TMEM88 plays a role in regulating Wnt signaling. Indeed, analysis of microarray data revealed that the expression of the Tmem88 gene was strongly correlated with that of Wnt signaling-related genes in embryonic mouse intestines. Together, we propose that TMEM88 associates with Dvl proteins and regulates Wnt signaling in a context-dependent manner.