Fanconi anemia (FA) is an inherited bone marrow failure syndrome associated with a progressive decline in hematopoietic stem cells, developmental defects, and predisposition to cancer. These various phenotypic features imply a role of FA proteins in molecular events regulating cellular homeostasis. Interestingly, we previously found that the Fanconi C protein (FANCC) interacts with the C-terminal-binding protein-1 (CtBP1) involved in transcriptional regulation. Here we report that FANCC with CtBP1 forms a complex with β-catenin, and that β-catenin activation through glycogen synthase kinase 3β inhibition leads to FANCC nuclear accumulation and FA pathway activation, as measured by the Fanconi D2 protein (FANCD2) monoubiquitination. β-catenin and FANCC nuclear entry is defective in FA mutant cells and in cells depleted of the Fanconi A protein or FANCD2, suggesting that integrity of the FA pathway is required for FANCC nuclear activity. We also report that FANCC with CtBP1 acts as a negative regulator of Dickkopf-1 (DKK1) expression, and that a FA disease-causing mutation in FANCC abrogates this function. Our findings reveal that a defective FA pathway leads to up-regulation of DKK1, a molecule involved in hematopoietic malignancies.