CHOP (GADD153) is a protein of the C/EBP family of transcriptional regulators, which dimerizes with other C/EBP members and changes their DNA-binding and transactivation properties. It induces growth arrest and apoptosis after endoplasmatic reticulum stress or DNA damage. CHOP is also expressed during early embryogenesis and upregulated in tumour tissues with defective Wnt signals. We report here that CHOP functions as a specific inhibitor of Wnt/T-cell factor (TCF) signalling. CHOP inhibits TCF-dependent transcription in human embryonic and colon cancer cell lines. Injection of CHOP mRNA into early Xenopus laevis embryos suppresses dorsal organizer formation and inhibits secondary axis formation and TCF-dependent transcription in response to Wnt-8, Dishevelled, beta-Catenin and TCF-VP16. In embryos and human cells, this inhibition depends on the N-terminal transactivation domain of CHOP, whereas the C-terminal dimerization domain is dispensable. CHOP binds to TCF factors, thereby preventing the binding of TCF to its DNA recognition site. Our findings demonstrate a novel function of CHOP as a Wnt repressor.