Although the oncogenic role of the Wnt/β-catenin pathway is well defined, it remains unclear how this pathway is aberrantly activated in lung cancer. We found that Dickkopf (Dkk)-3, a member of Dkk family of Wnt antagonists, is frequently inactivated in lung cancer and plays a role in suppressing lung cancer cell growth through inhibition of β-catenin/T-cell factor (TCF)-4 signaling. Dkk3 is the only Dkk family member abundantly expressed in normal lung, but silenced by promoter hypermethylation in a large fraction of lung cancer cell lines and lung tumors. Downregulation of Dkk3 was correlated with tumor progression and expression of nuclear β-catenin in lung tumors. Ectopic expression of Dkk3 in lung cancer cells with Dkk3 hypermethylation induced apoptosis and inhibited TCF-4 activity as well as nuclear accumulation of β-catenin and expression of TCF-4 targets c-Myc and cyclin D1. Furthermore, small interference RNA knock down of Dkk3 in cells lacking Dkk3 hypermethylation was sufficient to promote cell proliferation, β-catenin nuclear translocation and expression of c-Myc. These observations suggested that epigenetic inactivation of Dkk3 activates the Wnt/β-catenin pathway, thereby promoting the growth of lung cancer cells.