Beta-catenin mediates Wnt/wingless signaling and transcriptional activation by lymphocyte enhancer binding factor 1/T cell factor (LEF1/TCF) proteins with the assistance of multiple coregulators, including positive cofactors like p300/CBP and negative cofactors like HDACs. We previously demonstrated that a developmentally essential protein, Flightless-I (Fli-I), serves as a coactivator for nuclear receptor-mediated transcription. To further understand the action mechanism of Fli-I, we investigated the functional roles of Fli-I and Fli-I leucine rich repeat associated protein 1 (FLAP1) in transcriptional activation by beta-catenin and LEF1/TCF. beta-catenin-dependent transcription was activated by exogenous FLAP1 but inhibited by Fli-I. Reduction of endogenous FLAP1 levels compromised transcriptional activation by LEF1/TCF, beta-catenin and the p160 coactivator GRIP1. FLAP1 interacted directly with beta-catenin, GRIP1 and p300 and enhanced their activity. Furthermore, FLAP1 was strongly synergistic with p300 in supporting transcriptional activation by beta-catenin and LEF1/TCF, but Fli-I disrupted the synergy of FLAP1 with p300 and beta-catenin. Thus the opposing effects of Fli-I and FLAP1 may be a key regulatory mechanism for beta-catenin and LEF1/TCF-mediated transcription and thus for Wnt signaling, and some mutations of Fli-I may result in developmental defects, such as the flightless phenotype of Drosophila, by causing dysregulation of the Wnt/beta-catenin pathway.