Wnt molecules act as mitogenic signals during the development of multiple organs, and the aberrant activity of their pathway is often associated with cancer. Therefore, the production of Wnts and the activity of their signaling pathway must be tightly regulated. We have investigated the mechanisms of this regulation in the Drosophila hinge, a domain within the wing imaginal disc that depends on the fly Wnt1 ortholog wingless (wg) for its proliferation. Our results uncover a new feedback loop in the wg pathway in which the spatially restricted activation of the Sox gene SoxF (Sox15) by wg represses its own transcription, thus ensuring tight regulation of growth control. rotund, a wing proximodistal patterning gene, excludes SoxF from a thin rim of cells. These cells are thus allowed to express wg and act as the source of mitogenic signal. This novel mode of action of a Sox gene on the Wnt pathway -- through transcriptional repression of a Wnt gene -- might be relevant to human disease, as loss of human SoxF genes has been implicated in colon carcinoma.