Sumoylation is involved in mediating protein-protein interactions, subcellular compartmentalization and protein stability. Our analysis of various Wnt signaling molecules revealed that one of them, Tcf-4, is sumoylated at the endogenous level. At least one sumoylation site, Lys297, of Tcf-4 was identified. The sumoylation of Tcf-4 was enhanced by PIASy, a SUMO E3 enzyme, and inhibited by Axam, a desumoylation enzyme. Although PIASy did not affect the interaction of Tcf-4 with beta-catenin or DNA, Tcf-4, SUMO-1 and PIASy were co-localized in the nucleus and present in a complex in the PML body. PIASy enhanced beta-catenin-dependent transcriptional activity of Tcf-4, whereas Axam inhibited it. Reduction of the protein level of Axam by RNA interference led to an increase in sumoylation of Tcf-4 and activation of Tcf-4. Furthermore, beta-catenin and PIASy activated Tcf-4(K297R), in which Lys297 was changed to arginine, less than wild-type Tcf-4. These results suggest that sumoylation of Tcf-4 is involved in beta-catenin-dependent and Tcf-4-mediated gene expression in the Wnt signaling pathway.