Several studies have shown that cooperation between transforming growth factor beta (TGF-beta) and Wnt/wingless signaling pathways plays a role in controlling certain developmental events. These factors elicit their biological effects through distinct pathways in which TGF-beta and Wnt signaling induce activation of the transcriptional regulators Smads and lymphoid enhancer binding factor/T-cell-specific factor (LEF/TCF), respectively. To understand the mechanism for cooperativity between these pathways, we have investigated the molecular mechanism for this synergistic effect.Transcriptional assays were conducted by transient transfection of HepG2 cells with use of luciferase reporter constructs. Protein/protein interaction studies were conducted in vitro with the use of glutathione-S-transferase pull-down assays and in intact cells by immunoprecipitation and immunoblotting.We show that Smads physically interact with LEF1/TCF transcription factors and that specific DNA binding sites in the Xenopus twin promoter are required for synergistic activation by TGF-beta and Wnt pathways. In addition, we demonstrate that TGF-beta-dependent activation of LEF1/TCF target genes can occur independently of beta-catenin, an essential component of the Wnt signaling pathway.TGF-beta and Wnt signaling pathways can independently or cooperatively regulate LEF1/TCF target genes. This suggests that the cooperation between these pathways may be important for the specification of cell fates during development.