Wnt signaling involves inhibition of glycogen synthase kinase-3beta (GSK-3beta) and elevation of cytoplasmic beta-catenin. This pathway is essential during embryonic development and oncogenesis. Previous studies on both Xenopus and mammalian cells indicate that lithium mimics Wnt signaling by inactivating GSK-3beta. Here we show that serum enhances accumulation of cytoplasmic beta-catenin induced by lithium in both 293 and C57MG cell lines and that growth factors are responsible for this enhancing activity. Growth factors mediate this effect through activation of protein kinase C (PKC), not through Ras or phosphatidylinositol 3-kinase. In addition, Wnt-induced accumulation of cytoplasmic beta-catenin is partially inhibited by PKC inhibitors and by chronic treatment of cells with phorbol ester. Both calphostin C, a PKC inhibitor, and a dominant negative PKC exhibit partial inhibition on Wnt-mediated transcriptional activation. We therefore propose that Wnt signaling to beta-catenin consists of two interactive components: one involves inhibition of GSK-3beta and is mimicked by lithium, and the other involves PKC and serves to augment the effects of GSK-3beta inhibition.