Low-density lipoprotein receptor-related proteins 5 and 6 (LRP5 and LRP6) serve as Wnt co-receptors for the canonical β-catenin pathway. While LRP6 is essential for embryogenesis, both LRP5 and LRP6 play critical roles for skeletal remodeling, osteoporosis pathogenesis and cancer formation, making LRP5 and LRP6 key therapeutic targets for cancer and disease treatment. LRP5 and LRP6 each contain in the cytoplasmic domain five conserved PPPSPxS motifs that are pivotal for signaling and serve collectively as phosphorylation-dependent docking sites for the scaffolding protein Axin. However existing data suggest that LRP6 is more effective than LRP5 in transducing the Wnt signal. To understand the molecular basis that accounts for the different signaling activity of LRP5 and LRP6, we generated a series of chimeric receptors via swapping LRP5 and LRP6 cytoplasmic domains, LRP5C and LRP6C, and studied their Wnt signaling activity using biochemical and functional assays. We demonstrate that LRP6C exhibits strong signaling activity while LRP5C is much less active in cells. Recombinant LRP5C and LRP6C upon in vitro phosphorylation exhibit similar Axin-binding capability, suggesting that LRP5 and LRP6 differ in vivo at a step prior to Axin-binding, likely at receiving phosphorylation. We identified between the two most carboxyl PPPSPxS motifs an intervening "gap4" region that appears to account for much of the difference between LRP5C and LRP6C, and showed that alterations in this region are sufficient to enhance LRP5 PPPSPxS phosphorylation and signaling to levels comparable to LRP6 in cells. In addition we provide evidence that binding of phosphorylated LRP5 or LRP6 to Axin is likely direct and does not require the GSK3 kinase as a bridging intermediate as has been proposed. Our studies therefore uncover a new and important molecular tuning mechanism for differential regulation of LRP5 and LRP6 phosphorylation and signaling activity.