The "beta-catenin destruction complex" is central to canonical Wnt/beta-catenin signaling. The scaffolding protein Axin and the tumor suppressor adenomatous polyposis coli protein (APC) are critical components of this complex, required for rapid beta-catenin turnover. We determined the crystal structure of a complex between beta-catenin and the beta-catenin-binding domain of Axin (Axin-CBD). The Axin-CBD forms a helix that occupies the groove formed by the third and fourth armadillo repeats of beta-catenin and thus precludes the simultaneous binding of other beta-catenin partners in this region. Our biochemical studies demonstrate that, when phosphorylated, the 20-amino acid repeat region of APC competes with Axin for binding to beta-catenin. We propose that a key function of APC in the beta-catenin destruction complex is to remove phosphorylated beta-catenin product from the active site.