Wnt proteins can activate distinct signaling pathways, but little is known about the mechanisms regulating pathway selection. Here we show that the metastasis-associated transmembrane protein Wnt-activated inhibitory factor 1 (Waif1/5T4) interferes with Wnt/β-catenin signaling and concomitantly activates noncanonical Wnt pathways. Waif1 inhibits β-catenin signaling in zebrafish and Xenopus embryos as well as in mammalian cells, and zebrafish waif1a acts as a direct feedback inhibitor of wnt8-mediated mesoderm and neuroectoderm patterning during zebrafish gastrulation. Waif1a binds to the Wnt coreceptor LRP6 and inhibits Wnt-induced LRP6 internalization into endocytic vesicles, a process that is required for pathway activation. Thus, Waif1a modifies Wnt/β-catenin signaling by regulating LRP6 subcellular localization. In addition, Waif1a enhances β-catenin-independent Wnt signaling in zebrafish embryos and Xenopus explants by promoting a noncanonical function of Dickkopf1. These results suggest that Waif1 modulates pathway selection in Wnt-receiving cells.