Glycogen synthase kinase-3β (GSK-3β/zeste-white-3/shaggy) is a negative regulator of the wnt signaling pathway which plays a central role in the development of invertebrates and vertebrates; loss of function and dominant negative mutations in GSK-3β lead to activation of the wnt pathway inDrosophilaandXenopus.We now provide evidence that lithium activates downstream components of the wnt signaling pathwayin vivo,leading to accumulation of β-catenin protein. Our data indicate that this activation of the wnt pathway is a consequence of inhibition of GSK-3β by lithium. Using a novel assay for GSK-3β in oocytes, we show that lithium inhibits GSK-3β from species as diverse asDictyostelium discoideumandXenopus laevis,providing a biochemical mechanism for the action of lithium on the development of these organisms. Lithium treatment also leads to activation of an AP-1–luciferase reporter inXenopusembryos, consistent with previous observations that GSK-3β inhibits c-jun activity. Activation of the wnt pathway with a dominant negative form of GSK-3β is inhibited by myo-inositol, similar to the previously described effect of coinjecting myo-inositol with lithium. The mechanism by which myo-inositol inhibits both dominant negative GSK-3β and lithium remains uncertain.