Purpose: Aberrant activation of the Wingless-type (Wnt) pathway plays a significant role in the pathogenesis of several human cancers. Wnt inhibitory factor-1 (Wif-1) was identified as one of the secreted antagonists that can bind Wnt protein. We hypothesize that Wif-1 plays an important role in bladder cancer pathogenesis. Experimental Design: To test this hypothesis, epigenetic and genetic pathways involved in the Wif-1 gene modulation and expression of Wnt/β-catenin-related genes were analyzed in 4 bladder tumor cell lines and 54 bladder tumor and matched normal bladder mucosa. Results: Wif-1 mRNA expression was significantly enhanced after 5-aza-2′-deoxycytidine treatment in bladder tumor cell lines. Wif-1 promoter methylation level was significantly higher and Wif-1 mRNA expression was significantly lower in bladder tumor samples than in bladder mucosa samples. In the total bladder tumor and bladder mucosa samples, an inverse correlation was found between promoter methylation and Wif-1 mRNA transcript levels. However, loss-of-heterozygosity at chramosome 12q14.3 close to the Wif-1 gene loci was a rare event (3.7%). Nuclear accumulation of β-catenin was significantly more frequent in bladder tumor than in bladder mucosa and inversely correlated with Wif-1 expression. In addition, known targets of the canonical Wnt/β-catenin signaling pathway, such as c-myc and cyclin D1, were up-regulated in bladder tumor compared with bladder mucosa, and this up-regulation was associated with reduced Wif-1 expression at both mRNA and protein levels. Furthermore, transfection of Wif-1 small interfering RNA into bladder tumor cells expressing Wif-1 mRNA transcripts had increased levels of c-myc and cyclin D1 and accelerated cell growth. Conclusion: This is the first report showing that CpG hypermethylation of the Wif-1 promoter is a frequent event in bladder tumor and may contribute to pathogenesis of bladder cancer through aberrant canonical Wnt/β-catenin signaling pathway. The present study elucidates novel pathways that are involved in the pathogenesis of bladder cancer.