The stability of the Wnt pathway transcription factor β-catenin is tightly regulated by the multi-subunit destruction complex. Deregulated Wnt pathway activity has been implicated in many cancers, making this pathway an attractive target for anticancer therapies. However, the development of targeted Wnt pathway inhibitors has been hampered by the limited number of pathway components that are amenable to small molecule inhibition. Here, we used a chemical genetic screen to identify a small molecule, XAV939, which selectively inhibits β-catenin-mediated transcription. XAV939 stimulates β-catenin degradation by stabilizing axin, the concentration-limiting component of the destruction complex. Using a quantitative chemical proteomic approach, we discovered that XAV939 stabilizes axin by inhibiting the poly-ADP-ribosylating enzymes tankyrase 1 and tankyrase 2. Both tankyrase isoforms interact with a highly conserved domain of axin and stimulate its degradation through the ubiquitin-proteasome pathway. Thus, our study provides new mechanistic insights into the regulation of axin protein homeostasis and presents new avenues for targeted Wnt pathway therapies.