Wnt/β-catenin signaling plays critical roles during embryogenesis, tissue homeostasis, and regeneration. How Wnt-receptor complex activity is regulated is not yet fully understood. Here, we identify the Ly6 family protein LY6/PLAUR domain-containing 6 (Lypd6) as a positive feedback regulator of Wnt/β-catenin signaling. lypd6 enhances Wnt signaling in zebrafish and Xenopus embryos and in mammalian cells, and it is required for wnt8-mediated patterning of the mesoderm and neuroectoderm during zebrafish gastrulation. Lypd6 is GPI anchored to the plasma membrane and physically interacts with the Wnt receptor Frizzled8 and the coreceptor Lrp6. Biophysical and biochemical evidence indicates that Lypd6 preferentially localizes to raft membrane domains, where Lrp6 is phosphorylated upon Wnt stimulation. lypd6 knockdown or mislocalization of the Lypd6 protein to nonraft membrane domains shifts Lrp6 phosphorylation to these domains and inhibits Wnt signaling. Thus, Lypd6 appears to control Lrp6 activation specifically in membrane rafts, which is essential for downstream signaling.