Eaf factors play a crucial role in tumor suppression and embryogenesis. To investigate the potential mechanism of Eaf activity, we performed loss- and gain-of-function assays in zebrafish using morpholino and mRNA injections, respectively. We found that eaf1 and eaf2 inhibit Wnt/β-catenin signaling, thereby modulating mesodermal and neural patterning in the embryo. Moreover, ectopic expression of eaf1 and eaf2 in embryos and cultured cells blocked β-catenin reporter activity. By immunoprecipitation, we also observed that Eaf1 and Eaf2 bound to the Armadillo repeat region and C-terminus of β-catenin, as well as to other β-catenin transcription complex proteins, such as c-Jun, Tcf and Axin, suggesting the formation of a novel complex. In addition, the N-terminus of Eaf1 and Eaf2 bound to β-catenin and exhibited dominant-negative activity, whereas the C-terminus appeared to either harbor a suppression domain or to recruit a repressor. Both the N- and C-terminus must be intact for Eaf1 and Eaf2 suppressive activity. Lastly, we demonstrate a conservation of biological activities for Eaf family proteins across species. In summary, our evidence points to a novel role for Eaf1 and Eaf2 in inhibiting canonical Wnt/β-catenin signaling, which might form the mechanistic basis for Eaf1 and Eaf2 tumor suppressor activity.