Epithelial cells of the intestinal mucosa undergo a continual process of proliferation, differentiation, and apoptosis which is regulated by multiple signaling pathways. The Wnt/β-catenin pathway plays a critical role in this process. Mutations in the Wnt pathway, however, are associated with colorectal cancers. Krüppel-like factor 4 (KLF4) is an epithelial transcriptional factor that is down-regulated in many colorectal cancers. Here, we show that KLF4 interacts with β-catenin and represses β-catenin-mediated gene expression. Moreover, KLF4 inhibits the axis formation of Xenopus embryos and inhibits xenograft tumor growth in athymic nude mice. Our findings suggest that the cross talk of KLF4 and β-catenin plays a critical role in homeostasis of the normal intestine as well as in tumorigenesis of colorectal cancers.