Wingless (Wg) is a secreted ligand that differentially activates gene expression in target tissues. It belongs to the Wnt family of secreted signaling molecules that regulate cell-to-cell interactions during development. Activation of Wg targets is dependent on the ligand concentration in the extracellular milieu; cellular mechanisms that govern the synthesis, delivery and receipt of Wg are elaborate and complex. We have identified sprinter (srt), which encodes a novel, evolutionarily conserved transmembrane protein required for the transmission of the Wg signal. Mutations in srt cause the accumulation of Wg in cells that express it, and retention of the ligand prevents activation of its target genes in signal-receiving cells. In the absence of Srt activity, levels of Wg targets (including Engrailed in embryos lacking maternal and zygotic srt, and Senseless and Achaete in wing discs) are reduced. Activation of Wg targets in the receiving cells does not require srt. Hence, the function of Srt is restricted to events occurring within the Wg-producing cells. We show that srt is not required for any aspect of Hedgehog (Hh) signal transduction, suggesting specificity of srt for the Wg pathway. We propose that srt encodes a protein required for Wg secretion that regulates maturation, membrane targeting or delivery of Wg. Loss of srt function in turn diminishes Wg-pathway activation in receiving cells.