Wg/Wnt signals specify cell fates in both invertebrate and vertebrate embryos and maintain stem-cell populations in many adult tissues. Deregulation of the Wnt pathway can transform cells to a proliferative fate, leading to cancer. We have discovered that two Drosophila proteins that are crucial for cytokinesis have a second, largely independent, role in restricting activity of the Wnt pathway. The fly homolog of RacGAP1, Tumbleweed (Tum)/RacGAP50C, and its binding partner, the kinesin-like protein Pavarotti (Pav), negatively regulate Wnt activity in fly embryos and in cultured mammalian cells. Unlike many known regulators of the Wnt pathway, these molecules do not affect stabilization of Arm/beta-catenin (betacat), the principal effector molecule in Wnt signal transduction. Rather, they appear to act downstream of betacat stabilization to control target-gene transcription. Both Tum and Pav accumulate in the nuclei of interphase cells, a location that is spatially distinct from their cleavage-furrow localization during cytokinesis. We show that this nuclear localization is essential for their role in Wnt regulation. Thus, we have identified two modulators of the Wnt pathway that have shared functions in cell division, which hints at a possible link between cytokinesis and Wnt activity during tumorigenesis.