We isolated a Xenopus homolog of Frzb, a newly described protein containing an amino-terminal Frizzled motif. It dorsalized Xenopus embryos and was expressed in the Spemann organizer during early gastrulation. Unlike Frizzled proteins, endogenous Frzb was soluble. Frzb was secretable and could act across cell boundaries. In several functional assays, Frzb antagonized Xwnt-8, a proposed ventralizing factor with an expression pattern complementary to that of Frzb. Furthermore, Frzb blocked induction of MyoD, an action reported recently for a dominant-negative Xwnt-8. Frzb coimmunoprecipitated with Wnt proteins, providing direct biochemical evidence for Frzb-Wnt interactions. These observations implicate Frzb in axial patterning and support the concept that Frzb binds and inactivates Xwnt-8 during gastrulation, preventing inappropriate ventral signaling in developing dorsal tissues.