We have sought to determine the roles of beta-catenin and the Wnt signaling pathway in neurite outgrowth using a model cell system, the Neuro-2a neuroblastoma cell line. Activation of the Wnt signaling pathway disrupts a multiprotein complex that includes beta-catenin, Axin, and glycogen synthase kinase-3 (GSK-3), which would otherwise promote the phosphorylation and degradation of beta-catenin. Stabilized beta-catenin accumulates in the cytosol and in the nucleus; in the nucleus it binds to TCF family transcription factors, forming a bipartite transcriptional activator of Wnt target genes. These events can be mimicked by lithium (Li(+)), which inhibits GSK-3 activity. Both Li(+) and the GSK-3 inhibitor SB415286 induced neurite outgrowth of Neuro-2a cells. Li(+)-induced neurite outgrowth did not require beta-catenin-/TCF-dependent transcription, and increasing levels of beta-catenin either by transfection or using Wnt-3A was not sufficient to induce neurite outgrowth. Interestingly, Axin, which is also a substrate for GSK-3, was destabilized by Li(+) and ectopic expression of Axin inhibited Li(+)-induced neurite outgrowth. Deletion analysis of Axin indicated that this inhibition required the GSK-3 binding site, but not the beta-catenin binding site. Our results suggest that a signaling pathway involving Axin and GSK-3, but not beta-catenin, regulates Li(+)-induced neurite outgrowth in Neuro-2a cells.